Law firms are being urged to take extra care when charging fees for carrying out work in relation to payment protection insurance (PPI) mis-selling claims.
Following a series of complaints, The Solicitors Regulation Authority (SRA) has said that law firms need to ensure that they are not charging “excessive fees” for claims that require a “limited” amount of work.
On 29 August, exactly two years ahead of the Financial Conduct Authority’s (FCA) cut-off date for settling such claims, the SRA issued a warning notice to solicitors and law firms on the issue.
Paul Philip, Chief Executive of the SRA, said that “the vast majority of solicitors” were providing “a good service” by “helping to make sure their clients are properly compensated.”
However, he said that a “tiny minority” had been charging “excessive fees” for “limited” work.
“It is important that you do not exaggerate the time or effort involved in submitting a claim,” the SRA said in its statement.
It added that solicitors need to take greater care to ensure that clients are not contacting them as a result of the cold calling activities of 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,” its warning read.
Going into the future, the SRA has 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.