‘Ambulance chasers’ in the crosshairs as claims industry faces scrutiny

As London’s legal scene gets more litigious, creeping closer to the American ‘sue everything’ culture, so-called ambulance chasing claims firms are starting to appear in the headlines – for the wrong reasons.

The Financial Conduct Authority (FCA)’s chief executive, Nikhil Rathi, has been critical of claims management companies (CMC) or similarly specialised law firms throughout the City watchdog’s review of the motor finance redress scheme.

So much so that he roped in the legal regulator, Solicitor Regulator Authority (SRA), last year to address the heavy marketing these kinds of firms were engaged in – long before the significant Supreme Court ruling was even handed down.

When the City regulator revealed its long-awaited redress scheme earlier this year, Rathi said, “There is no need to use a claims management company or a law firm”. He had previously warned consumers that if they did, they could lose over 30 per cent of any money they were set to receive.

As part of its scheme, the FCA has also excluded anyone who is pursuing court action, through a CMC or law firm, in the hope of securing a higher level of compensation from the redress scheme.

These types of setups are also on the radar of legal regulators, as the SRA says there is a “growing” concern about how the market operates.

As of 31 January 2026, the SRA, which regulates law firms in England and Wales, had 89 open investigations involving 71 firms that manage high-volume consumer claims, and has so far closed 7 firms operating in this area.

There have also been a number of high-profile cases of firms specialising in high-volume claims work failing, including the collapse of SSB Law in 2024, leaving behind debts of £200m.

Where there’s blame there’s a claim…

In the same week, the Court of Appeal handed down a significant ruling that had put the setups of litigating teams under the microscope.

The original High Court ruling had essentially suggested that unauthorised staff, such as paralegals, could not ‘conduct litigation’ even under supervision.

Firms specialising in high-volume, process-driven litigation were at the highest risk of this ruling.

The court overturned the ruling this week; however, there was a T&C attached to the bottom, as Joshua Swift, partner at Withers, explained, “The [judgment] emphasis on ‘proper direction, management supervision and control’ is not just a formality- it sets a clear expectation that authorised individuals remain fully accountable.”

“Delegation is fine, but responsibility stays firmly with the authorised solicitor,” stated Swift.

The message from both regulators and the courts is becoming clear: for firms built on high-volume, low-oversight models, the era of the ‘unsupervised’ claims machine is over.

Eyes on the Law is a weekly column by Maria Ward-Brennan focused on the legal sector.