FCA and SRA to review claims management practices

On 6 May 2026, the FCA launched a review of the claims management market, working closely with the SRA and other regulators, to examine the causes of poor practice, identify areas for reform, and use its supervisory and enforcement powers where necessary. The review forms part of a broader, co-ordinated regulatory effort to raise standards. This briefing considers the FCA’s review. 

What is the FCA going to review?

The FCA’s review will focus on the underlying causes of poor consumer outcomes received from some CMCs. This appears to be through a Consumer Duty lens (to which CMCs are subject) and consistent with issues we identified at the time of Consumer Duty implementation (as discussed in our 2022 podcast). In particular, the FCA will consider misleading and aggressive advertising and unfair termination fees. Additional areas of concerns include where consumers are signed up without informed consent, including via unclear online prompts (such as social media adverts), or where multiple professional representatives are instructed, creating confusion and delaying compensation. Other key aspects of the review include:

• Fair value: competition, price/quality and whether current price caps remain appropriate, particularly given free-to-use redress routes
• Financial incentives: fee structures, funding and insurance arrangements, and related conflicts of interest 
• Consumer journey: end-to-end experience, including lead generation, marketing and advertising; and
• Regulatory behaviour: differences across regimes, including firms operating without appropriate permissions.

Where legislative change is needed, the FCA will make recommendations to Government and relevant bodies, including on strengthening compensation mechanisms for harm caused by CMCs and CLFs.

What are other regulators doing?

The FCA has framed this as a co-ordinated regulatory effort. In particular, it is working with the Advertising Standards Authority (ASA), the Solicitors Regulation Authority (SRA) and the Information Commissioner’s Office (ICO) to share intelligence and take targeted action where poor practice is identified, alongside parallel action already taken within each regulator’s remit. Notably, the regulatory partners also announced a joint taskforce in March 2026 to tackle very similar issues in motor finance claims.

Next steps

The FCA is expected to provide a further update in mid May. CMCs and law firms should continue to expect increasing co-ordination between regulators regarding their activities and potential intervention where the FCA find failings. There is also potential for further regulatory reform in particular areas such as fees, advertising, disclosures to customers and conduct. Over the longer term, the review may lead to recommendations for legislative change.

Comment

The FCA and the SRA are focused on dealing with poor CMC/CLF conduct. Ensuring the right framework emerges from the review, backed by effective supervision and enforcement will be critical.

Alongside this review, reforms to the Financial Ombudsman Service (see our briefing) will also play an important role in ensuring a system that supports legitimate claims, while filtering out bogus or poorly evidenced complaints. The overall objective must be a regime in which CMCs and CLFs can continue to operate effectively, but where claims are properly founded, consumers are fully informed and the process delivers fair and efficient outcomes for all parties.