Consumer Duty for solicitors' firms with retail clients

The FCA Consumer Duty (PRIN 2A) applies with particular force to SRA-regulated firms carrying out incidental financial activity, mortgage-related advice, or acting under the SRA Financial Services (Scope) Rules 2001. This page sets out how the four outcomes translate into operational practice for solicitors' firms, how the Duty widens the boundary between complaint and PI claim, and the compliance checklist Apex uses when quoting or reviewing PI cover for firms in this sector.

The four outcomes — what they mean for solicitors' firms

Consumer Duty complaint patterns in this sector

Complaints that once fell outside the FCA regulatory perimeter can now generate PRIN 2A findings and, via that route, PI notification. Examples we see for solicitors' firms:

1. Mortgage referrals to unsuitable lenders. Client argues the firm did not test whether the referred lender's product was suitable. Under Consumer Duty this can escalate to FOS via the incidental-activity route.
2. Equity-release referral outcomes. Elderly client entered lifetime mortgage on adviser referral. Complaint argues the firm did not test the recommendation against the client's expressed objectives. FOS-referred.
3. Non-contentious costs escalation. Fixed-fee estate work went to hourly billing without a fresh estimate. Complaint reframed as consumer-understanding failure.

Where the Duty overlaps PI cover

PI wordings for solicitors' firms respond to civil liability claims. Consumer Duty enforcement action is regulatory, not civil — but the two intersect at several practical points:

1. SRA MTC scope vs Consumer Duty. The SRA Minimum Terms and Conditions define the PI cover boundary. Consumer Duty complaints that touch civil liability fall inside MTC scope; regulatory-only findings do not.
2. Notification triggers under MTC clause 5. Firms must notify circumstances that could reasonably give rise to a claim. Consumer Duty thematic-review findings applicable to the firm meet that test.
3. EPP and Cessation Period. Firms exiting must consider whether Consumer Duty complaints remain live — run-off cover under the Cessation Period must respond to pre-cessation acts even where the complaint emerges post-cessation.
4. Aggregation under SRA MTC clause 2.5. Multiple clients affected by the same failing may aggregate. Consumer Duty makes this more likely by widening what counts as a failing.

Consumer Duty compliance checklist for solicitors' firms

Use this as a self-assessment; it maps to what a specialist PI insurer will ask at renewal.

• ✓SRA Handbook cross-referenced with Consumer Duty outcomes for incidental activities
• ✓Client-care letters tested for comprehension — not just SRA-compliant
• ✓Referral documentation captures the outcome-testing, not just the referral
• ✓Complaints procedure mapped to DISP where incidental activity is in scope
• ✓Vulnerable-client register maintained; adjustments recorded per matter
• ✓Annual Consumer Duty report available to the SRA and PI insurer
• ✓PI notification pathway understood at partner level, not just compliance
• ✓MTC clause-5 circumstance-notification threshold explicitly considered for thematic-review findings