The Solicitors Regulation Authority in January 2026 issued guidance for law firms handling motor finance commission claims, following an August 2025 Supreme Court ruling. That ruling held that in some cases motor finance companies had unfair commission arrangements requiring refunds, while dealers did not necessarily owe a duty of loyalty to customers. The FCA is also developing an industry‑wide redress scheme (consulted on in Oct. 2025) for customers treated unfairly from 2007–2024, with final rules expected in early 2026.
The SRA reminds firms they must always “act in [their] clients’ best interests” and comply with professional obligations. They should assess how the judgment affects each client’s case, and clearly explain the realistic prospects of pursuing a claim (including through the FCA redress scheme) before signing any fee agreement. Firms must also ensure any claims‑management partners are FCA-authorised, that advertisements are not misleading, and that clients are informed of costs (or “no win, no fee” arrangements) if they withdraw.
The SRA stressed that if a client’s claim is no longer viable, the lawyer must promptly advise them and avoid charging fees inconsistent with the outcome.
The guidance reflects heightened regulatory scrutiny of high-volume consumer claims and the conduct of firms operating in this space. Regulators have previously expressed concern about misleading marketing and inappropriate fee structures, and the SRA indicated it will take enforcement action where standards are breached. Firms are therefore encouraged to review internal processes and training to ensure compliance as the FCA redress framework develops.