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As we reach the end of another busy year, the claims landscape across the construction, financial and legal sectors has continued to evolve at pace. Over the past 12 months, our teams, including those in Scotland and Northern Ireland, have seen shifting economic pressures and heightened regulatory scrutiny drive notable trends in the claims brought against financial and construction professionals, and solicitors.
This article reflects on those developments and what they might signal for 2026.
Financial Professionals
2025 has continued the trend of increased scrutiny for financial professionals, with the changing economic landscape providing greater challenges for all.
For FCA regulated professionals , it has been a year of change. 2025 has seen the maturing of the Consumer Duty, and, with that, the scrutiny it brings. The FCA’s 5 year plan has seen a large number of changes already announced, including:
- Implementation of the Investment Advice Assessment Tool, which has seemingly given claimants a new tool to use when pursuing claims, despite it being non-legally binding
- Changes to the FOS, specifically the interest rate applied to damages and the ability to refer specific points of disputed regulation to the FCA
- Dear CEO and portfolio letters being withdrawn or reviewed and
- Changes to the Appointed Representative scheme, meaning ARs may share the responsibility of regulatory compliance with principals.
The FCA has also announced plans to scrap the minimum requirement for continuing professional development (CPD), allowing firms the freedom to decide how much training their staff need, based on their individual roles. The change will mean a decrease in the administrative burden, but will also require firms to take greater ownership of the competency of their staff.
The end of fixed-term interest periods and alleged failures to warn about future affordability have been the key areas of focus for claims against mortgage brokers, but to a lesser extent than recent years. Although rates stabilised, compared to the sharp rises of previous years, many borrowers have still pursued claims, where their mortgage payments have become unmanageable.
Pension advice also remains a key focus. Complaints relating to defined benefit (DB) transfers continue to come to light, whilst allegations relating to high-risk or illiquid investments have persisted, particularly where advisers are accused of insufficient due diligence.
Pension trustees have faced another demanding year, with The Pensions Regulator (TPR) continuing to push higher governance. TPR has set out a new agenda, which places stronger emphasis on transparency, governance, and long-term value, particularly within defined contribution (DC) schemes. Previously, much of TPR’s attention – often with good reason – has been on DB schemes.
For accountants, it has been a calmer year than usual, although we have seen increasing claims arising from alleged failures in tax planning and Research & Development (R&D) relief submissions, with HMRC’s ‘determined’ approach continuing to mean claims are pursued.
Claims against auditors have remained steady. The implementation of the Audit, Reporting and Governance Authority (ARGA), is still awaited, but has placed accountants under greater expectations – with pressure to ensure that they are seen to be complying with any changes, before they have even come into force. This is just one of the problems of talking about reform for so long before actually implementing it.
Looking ahead to 2026, what is clear is that regulation is becoming tighter, oversight is increasing and expectations are rising. Across the board, we expect claims against financial professionals to increase. Emerging technologies, such as AI, could introduce new benefits to professionals, but also new avenues for complaints, if not properly managed. We also anticipate the fallout from the November 2025 budget will continue – with clients being driven to riskier investment opportunities, the role of an adviser has never been more critical. Following the budget, the FCA has provided greater clarity between retail and professional investors, in an attempt to make investments more accessible and engaging. At the same time, the regulator has confirmed that ‘jargon’, which could be unsuitable for professional investors, will be removed. We anticipate that clients who are unhappy with these changes, will look for someone to blame. Whilst they may criticise Rachel Reeves over a coffee with friends, in reality, it means increased risks for those professionals involved.
Specifically in relation to FCA regulated entities, the landscape continues to evolve and professionals will need to ensure they react quickly to changes, to ensure they avoid claims where possible.
For pension trustees, there will also be an increase in trustee oversight. Trustees who fail to comply with rules on scheme loans will risk regulatory sanctions. This reinforces our view that trustees must remain up to date with legal and technical changes. Being able to evidence that a trustee has engaged with the updated toolkit, recorded their learnings, and taken steps to apply it in practice, will help in defending any claims they face.
Author: Ash Daniells
Key Contact: Fleur Rochester
Construction
We have continued to see a wide range of claims against architects, engineers, surveyors, and design and build contractors throughout the year. However, as predicted in our end of year review in 2024, we have also seen a significant number of fire and building safety related claims.
The difficulties faced by contractors and their design teams arising from the Building Safety Act 2022 (“BSA”) and post-Grenfell fire safety claims has continued to result in increased insolvencies, as entities are unable to meet the claims faced where policy exclusions mean they are without the support of any insurance(s) – something that is affecting a range of businesses from small, independent, consultants to some large contractors.
Even when there is insurance in place, other non-insured claims may result in insolvency. This may (in respect of the insured claims) increase insurers’ exposure as a result of direct claims under the Third Parties (Rights against Insurers) Act 2010 and legal difficulties insurers then have pursuing contributions claims following the Riedweg judgment [2024]. That risk can often be more prevalent where a claim is brought under the Defective Premises Act 1972 (“DPA”) as parties cannot contract out of liability under the DPA. Further, any clause limiting liability (for example a net contribution clause which would limit any liability for claims in contract or tort) is of no effect (s6(3) of the DPA). That can result in one party (out of several that may have shared responsibility for a defect) being left responsible for the full liability where the other responsible parties are insolvent and uninsured.
In May, the Supreme Court handed down its judgment in URS Corporation Ltd v BDW Trading Ltd [2025]. Whilst that claim related to structural defects, it is highly relevant to building safety claims generally as it provided confirmation as to the expansive scope of the BSA, the DPA and how claims under the Civil Liability (Contribution) Act 1978 (“Contribution Act”) will operate alongside these pieces of legislation. The BDW decision provided clarity on when a cause of action arises under the Contribution Act. In short, no judgment or settlement payment is required; a payment in kind, such as carrying out remedial works, is sufficient. The court also confirmed that the extended limitation periods for claims provided for under s135(3) BSA are not just limited to direct claims under the DPA, but also to other claims dependent on the limitation period under the DPA. This includes negligence claims and claims under the Contribution Act. The decision does provide some comfort for the construction industry. It makes clear that costs incurred in investigating and rectifying building safety defects are recoverable from the relevant parties in the supply chain but this has also widened the scope for such claims. No doubt, this will have a negative impact upon insurers who will likely see claims which would otherwise have been time barred.
Looking forward to 2026, we anticipate there will continue to be further developments relating to building safety and the BSA as cases continue to progress through the courts. There will also be further and significant pressure on the industry to finalise remedial schemes relating to unsafe cladding in advance of the Government’s 2029 deadline (for buildings over 18 meters). However, it may be difficult for the industry to meet that deadline given the time we understand it is taking for approval of remedial schemes via the Building Safety Regulator.
Author: Mark Cordingley
Key Contact: Chris Butler
Solicitors
This year we have seen a significant rise in claims or complaints against solicitors from unusual sources. This appears to be, in part, due to a reduction in the deference formerly given to professionals and the growth in campaigns for social justice. This is exposing solicitors and firms to new sorts of liability. Whilst some of the matters might not be conventional professional indemnity claims, they all have the potential to cause financial or reputational harm in one way or another to a firm.
Traditionally, solicitors would face claims or complaints from unhappy clients and certain narrowly confined third parties, such as disappointed beneficiaries. But now, there is an additional class or range of possible non-client claimants – pressure groups, litigation funders , liabilities arising out of judicial enquiries and an increased propensity for regulatory complaints.
Social activism plays a much greater part in the legal landscape today than it did – even five years or so ago. There are many social activists who take aim not just at perceived corporate wrongdoers, but also at their alleged enablers, such as professional advisers or insurers.
The types of issues we are seeing now include campaigns against tax avoidance – where vocal and sophisticated pressure groups are targeting professionals who are believed to be assisting tax avoidance. These individuals are often highly skilled journalists, who are very well able to conduct savvy media campaigns through multiple channels, and they are not afraid to report solicitors and barristers directly to their regulators.
The Post Office inquiry is another source of claims against lawyers – again, not from clients, but by others indirectly but detrimentally affected by the alleged misconduct by the lawyers involved. The misconduct being investigated includes drafting and advising on unfair contracts with sub-postmasters, and failing to disclose material evidence in proceedings.
Similarly, a law firm is at the heart of a SDT investigation into a USD4bn crypto fraud perpetrated by their client One Coin. The lawyers are alleged to have taken steps to throw doubt on fraud suspicion being circulated about their client, via correspondence sent to journalists, the FCA and the police.
These cases have prompted a wider debate about litigation ethics and the extent to which a lawyer’s duty to act in the best interests of a client means it should protect that client’s brand at all costs. Indeed, the legal profession’s attempts to control SLAPPs (a Strategic Lawsuit Against Public Participation) has caught the attention of regulators.
A SLAPP is an abusive lawsuit, filed by a private party, with the purpose of silencing free speech. A SLAPP can include unduly aggressive, intimidating and mis-labelled conduct. The SDT (Solicitors Disciplinary Tribunal) recently looked at SLAPPs in the context of the improper use of a “without prejudice” heading to correspondence. In a decision subject to appeal (SRA v Ashley Hurst [16.05.25]), whilst the SDT considered there had been a breach of SRA principles in attempting to keep communications confidential, it was not a SLAPP situation because there was no attempt to oppress investigation into the tax affairs of the client.
So, pulling this all together, what does this type of activity mean for law firms? Keep in mind that third parties, not just clients, are able to make plausible regulatory complaints as interested ‘bystanders’. Consider additional safeguards i.e. undertaking a risk and reward analysis when a retainer is incepted, which considers potential reputational harm, regulatory risks and uninsured losses. Finally, firms should be actively scouting for the next issue which will be of interest to regulators, pressure groups and others.
Authors and contacts: Laura Hurst and Paul Castellani
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United Kingdom