MS26/2: Claims management services: market study terms of reference

We are conducting a market study into claims management services.

Why we're carrying out a market study

We have launched a market study to gather evidence to understand the root causes of practices we have observed by firms in the claims management market and how they impact competition and consumer outcomes.

This includes practices we have observed by FCA-regulated claims management companies (CMCs) and lead generators, as well as legal professionals regulated by the Solicitors Regulation Authority (SRA) and other legal regulators. We will be working closely with the SRA as we carry out the market study.

The study will inform whether interventions are needed to promote effective competition, support customer choice, and ensure the claims management services market serves consumers in the way we expect.

Our work will focus on claims management services provided in relation to financial services and financial products claims and housing disrepair claims.

Who is this for

Current and potential suppliers of claims management services, including those regulated by the SRA, the Bar Standards Board, CILEx Regulation and the Law Society of Scotland.
Firms that provide lead generation services.
Consumers who have used, or may use, claims management services to support them with a claim.
Financial services firms that have had claims against them handled by claims management service providers.
Investors in claims management firms.

Update on our work

Following the launch of the market study, we invited views on the proposed scope and focus areas set out in the Terms of Reference (ToR).

We received 31 responses from a broad range of stakeholders, including claims management companies, law firms, trade associations, financial services firms and insurers.

Overall, respondents were broadly supportive of the market study and its proposed scope, and generally agreed with our focus on the consumer journey, pricing-related harms, business model incentives, and the regulatory landscape. Views on financial and operational resilience were more mixed, with some respondents considering it a lower priority than the other themes.

Responses covered a range of themes, including the following:

The role and value of claims management services

Some respondents emphasised the importance of a balanced, proportionate and evidence-based assessment of the claims management sector. They noted that legitimate high-volume representation can benefit consumers, including vulnerable consumers and those who may lack the confidence to pursue complaints independently.

As set out in the ToR, we recognise that claims management services can play an important role in helping consumers pursue redress and access justice. Our study will take a holistic, evidence-based approach, drawing on input from across the market.

The conduct and business practices we should focus on in the market study

Many respondents highlighted examples of conduct and business practices they believed merited greater focus. These included issues relating to data practices and Subject Access Requests, the use of AI in claims generation, risks associated with multiple representation, and the role of a wider range of market participants across the claims sector.

We consider these issues to be captured by the matters set out in the ToR and will examine them where relevant during the study.

Our regulatory perimeter and the scope of the market study

Some respondents suggested the market study should examine whether the regulatory perimeter for claims management services remains fit for purpose, including whether certain claims-related activities currently outside the perimeter should be brought within scope. In particular, respondents raised concerns about the study’s exclusion of Northern Ireland, suggesting this could increase regulatory divergence and leave potential consumer harm unaddressed.

As set out in the ToR, the market study is conducted under the Enterprise Act 2002, which limits its scope to claims management services provided in Great Britain. Where we identify issues outside the scope of the market study, we will consider whether further action is appropriate, including engagement with other authorities or recommendations to Government.

Potential outcomes of the study

One respondent considered it would be prudent for us to make a market investigation reference to the Competition and Markets Authority (CMA), given the CMA's wider investigatory and remedial tools.

We will consider whether making a reference is appropriate in this market and intend to consult on our proposed decision in our interim report.

Next steps

We are grateful to all respondents for their engagement. Having carefully considered the feedback received, we will proceed with the market study as set out in the ToR and will continue to take account of relevant evidence and stakeholder views as the study progresses.

We are now gathering detailed evidence from market participants and other stakeholders, and expect to publish interim findings in December 2026. Given the tight statutory timetable for market studies under the Enterprise Act 2002, we are grateful in advance for stakeholders’ timely cooperation with information requests.

Background to the market study

In recent years, we’ve taken steps to mitigate the risk of consumer harm and promote good outcomes in the market for claims management services (such as a cap on fees and restrictions on unsolicited marketing).

Despite these measures, we’ve identified practices that raise concerns about consumer outcomes and effective competition.

We want to better understand the root causes of these behaviours, including:

Misleading or unclear advertising.
Weak customer acquisition controls.
High volume claims activity.
Complex or unclear fee structures.
Limited consumer understanding.
Business models focused on scale rather than outcomes.

First published: 19/05/2026 Last updated: 13/07/2026