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No win for Lorrells LLP in 'no win no fee' ASA complaint

4 November 2015
The ASA have held in their decision of 28 October 2015 that a statement “you will receive 100% of the money that we reclaim on your behalf” on Lorrells’ website was in breach of the CAP Code.

Lloyds Banking Group (Lloyds) complained that the above statement was misleading. Lloyds is a lender often subject to PPI claims made under conditional fee arrangements (CFAs). The complaint was made on the basis that Lloyds understood Lorrells claimed their fee directly from the judgment or settlement payment made by the lender to the claimant.

Following the reform of CFAs under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which came into force on 1 April 2013, solicitors cannot reclaim their success fee from an opponent, but must instead claim this from their client. Although this was not discussed in the judgment and there was no suggestion that Lorrells were acting in breach of this act, the ASA may have been influenced by these reforms and the narrowing scope of CFAs. The ASA held that a lack of evidence meant the claim was unsubstantiated, in breach of rule 3.7, and misleading under rules 3.1 and 3.3.

The ASA confirmed that Lorrells’ “lack of response” to the ASA, and “apparent disregard for the Code” breached rule 1.7 (unreasonable delay), and Lorrells were told to respond in future. This serves as a warning to all law firms that they must respond promptly to the ASA, and take care that advertising statements made on their own websites can be substantiated.

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