The Solicitors Regulation Authority (SRA) is calling on law firms to take care not to charge “excessive fees,” particularly in relation to undertaking work in relation to the mis-selling of payment protection insurance (PPI).
The calls come at a time when consumers are being urged to open and settle claims sooner rather than later, after the Financial Conduct Authority (FCA) announced a cut-off date for all claims of 29 August 2019.
In fact, the SRA’s warning notice was issued on 29 August – exactly two years before the upcoming deadline.
The regulator has said that solicitors who charge fees “greatly in excess” of their usual hourly rate are not acting in the best interests of their clients.
The comments come after the regulator claimed it had received reports of some solicitors charging “unreasonable costs for a limited amount of work.”
In its warning notice, the SRA said: “This is particularly the case where the work carried out is limited, for example, to submitting a notice of claim and agreeing settlement.
“It is important that you do not exaggerate the time or effort involved in submitting a claim,” it said.
Going forward, the SRA said that any charges above 15 per cent will be deemed “unreasonable” unless law firms can prove that the work involved in investigating any one particular claim “clearly demands” a higher rate.
The regulator said that solicitors should also take care to ensure that clients do not contact them as a direct result of cold calling spearheaded by third parties.
“Some third parties obtain client details illegally and you may be at risk of infringing the Data Protection Act by the unauthorised use or handling of data,” it said.
Paul Philip, Chief Executive of the SRA, added: “The vast majority of solicitors provide a good service, helping to make sure their clients are properly compensated.
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