- An authorised body, or an individual as permitted under regulation 9.8(b)(ii) of the SRA Authorisation of Individuals Regulations, providing relevant financial services claims management activities or activities that would be regulated financial services claims management activities but for the exclusion in article 89N of the Regulated Activities Order, whether under a relevant financial services claims management agreement or otherwise, must provide any client with the information set out in rules 1.2 to 1.5 in writing and receipt must be acknowledged by the client.
- Before entering into a contract with a client the following costs information:
- unless the fee is for a fixed sum, the basis upon which fees will be charged and an estimate of all such fees, making clear the circumstances in which fees could exceed the estimate;
- if either the PPI fee restriction or the financial products and services fee restriction applies or could apply to any part of the services provided:
- Before entering into a contract with a client the following information:
- where the claim is in scope of a statutory ombudsman, a statutory compensation scheme or an alternative dispute resolution scheme, the fact that the client can bring the claim themselves free of charge and without representation;
- if the client is advised to proceed with a claim in a way which means that a fee cap would not apply to either the whole or part of a claim, in circumstances where it would be possible to proceed with a claim in a way which would mean that a fee cap would apply, a clear explanation of that fact together with reasons as to why it is in the client's best interests to proceed as advised.
- If the claim was initially commenced and was subject to a fee cap and the client is advised to pursue the claim in a way which means that the fee cap ceases to apply the client must be informed of this before any action is taken and the additional costs consequences fully explained to the client at that stage.
- When invoicing the client, if the claim is subject to a fee cap but your charges exceed the maximum amount that may be charged under the fee cap because some charges fall outside it, you must specify which charges fall within the fee cap and which do not.
SRA Claims Management Fees Rules
SRA Claims Management Fees Rules
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- If you are an authorised body, or an individual as permitted under regulation 9.8(b)(ii) of the SRA Authorisation of Individuals Regulations, providing regulated claims management services or activities that would be regulated claims management services but for the exclusion in article 89N of the Regulated Activities Order, you will, subject to rule 2.2, be subject to the fee restrictions set out in rules 2.3 to 2.9
- Rule 2.1 will apply to you if you
- enter into a relevant financial services claims management activities that provides for a person to pay charges either under that agreement or a connected agreement, or
- you impose charges on a person for, or in connection with, relevant financial services claims management activities,
except to the extent to which the PPI fee restriction applies.
- The fee restriction on charges for any claim is the lower of:
- the maximum percentage rate of charge with reference to the redress awarded for a claim, or
- the maximum total charge
in the table below applicable to the redress awarded for that claim.
Band Redress awarded for a claim (3) The maximum percentage rate of charge The maximum total charge (£) 1 1-1,499 30% 420 2 1,500 - 9,999 28% 2,500 3 10,000 - 24,999 25% 5,000 4 25,000 – 49,999 20% 7,500 5 50,000 or above 15% 10,000 - The fee restriction applies to the entire claim even where the claim is based on various grounds.
- The fee restriction includes all expenses and other charges provided for or imposed under the relevant financial services claims management agreement or connected agreement, or for, or in connection with, the relevant financial services claims management activities, but does not include VAT.
- The fee restriction in rule 2.3 does not apply:
- to any charges for reserved legal activities;
- to charges imposed in circumstances where the relevant services were provided, or the agreement to provide them was entered into and instructions to pursue the claim were given, before these rules came into force, provided that the charges imposed were not altered after these rules came into force;
- if no award for monetary redress is made in the client's favour in relation to the claim;
- if the claim does not fall within the scope of any of the following:
- the complaints resolution rules set out in the FCA Handbook DISP: dispute resolution
- any statutory ombudsman scheme including but not limited to the Financial Ombudsman Service and the Pensions Ombudsman, or
- any statutory compensation scheme including but not limited to the Financial Services Compensation Scheme.
- to any charges for activities carried on in relation to actual or potential court proceedings if:
- there are reasonable grounds to consider that the limitation period for issuing court proceedings may be about to expire and that it is therefore imminently necessary to issue court proceedings to prevent the claim from becoming time-barred;
- the claim cannot be pursued or continued through any statutory ombudsman scheme or any statutory compensation scheme because either the claim has already been determined under the relevant scheme or the operator of the relevant scheme has determined that the claim cannot or should not be considered under the scheme;
- there are reasonable grounds to consider that the value of the claim may exceed the maximum redress which can be awarded by any applicable statutory compensation or statutory ombudsman scheme;
- the claim raises a novel, complex or important point of law which has potential wider ramifications such as to indicate that a representative action or a Group action before a court is the appropriate course and in the client's best interests; or
- any time limit for referring the complaint to the relevant statutory compensation or statutory ombudsman schemes has already elapsed and there are no reasonable grounds to believe that the claim could be brought within such scheme out of time.
- to a claim before the Pensions Ombudsman, the Financial Ombudsman Service or Financial Services Compensation Scheme where the SRA is satisfied that there are exceptional circumstances such that it is in the best interests of the client to receive specialist legal advice with the result that the reasonable costs of bringing the claim are likely to exceed the maximum permitted total charge provided in rule 2.3.
- If the fee restriction in 2.3 does not apply as a result of rule 2.6 you must not impose charges for or in connection with relevant financial services claims management activities or enter into a relevant financial services claims management agreement that provides for the payment of one or more charges, that, alone or in combination with any other charge under that agreement or a connected agreement, or otherwise imposed in connection with the relevant services, exceed an amount that is reasonable in the circumstances in light of the services provided.
- You must not impose any charges for or in connection with relevant financial services claims management activities or enter into a relevant financial services claims management agreement that provides for the payment of one or more charges, that, alone or in combination with any other charge under that agreement or a connected agreement, or otherwise imposed in connection with the relevant services, exceed or are capable of exceeding a fee restriction applied pursuant to rule 2.3 or, as the case may be, rule 2.7.
- Any charges imposed under a relevant financial services claims management agreement or for, or in connection with, relevant financial services claims management activities will be unenforceable to the extent they exceed or are capable of exceeding the fee restrictions imposed by these rules, and you must reimburse the amount of any overpayment promptly, together with interest at a rate of 8% per annum simple interest from the date of overpayment, irrespective of whether your client has sought reimbursement or not.
- In this rule an agreement (agreement A) is a connected agreement in relation to a relevant financial services claims management agreement (agreement B) if:
- agreement A enables a charge to be imposed on a client in connection with a claim, and agreement B provides for regulated claims management activities in relation to that claim; or
- agreement A provides for services in connection with the regulated claims management activities provided for in agreement B; or
- agreement A varies, supplements, novates or replaces agreement B (or vice versa); or
- agreement A requires the client to pay a fee to a lead generator in respect of the activities performed or to be performed under agreement B.
Supplemental notes
Made by the SRA Board on 23 January 2024.
Made under sections 31 of the Solicitors Act 1974, section 9 of the Administration of Justice Act 1985, section 83 of the Legal Services Act 2007 and section 33 of the Financial Guidance and Claims Act 2018.