Britain eyes solicitors’ client-account interest
Britain’s Ministry of Justice (MoJ) has mooted the possibility of taking client-account interest from all law firms to generate extra cash for access to justice, according to the Law Society Gazette of England and Wales.
Many firms rely on interest to assist cashflow, while some use it to cover general overheads and training, and some firms would fold immediately without it, one solicitor commented to the publication.
The Gazette says that the ministry has held a series of round-table meetings this month with legal-aid providers on the possibility of an Interest on Lawyers' Client Account (ILCA) scheme.
It has also spoken to regulators – including the Solicitors Regulation Authority (SRA).
Questions raised
One round-table attendee told the Gazette that the ministry suggested taking the full benefit from client-account interest from all firms, which might be fed back into legal-aid work.
The Gazette adds, however, that the ministry’s thinking appears to have raised more questions than answers.
A solicitor source remained unclear about who would be in charge of the scheme, whether the MoJ would run the client account, whether the ministry would take all the interest or pay a fair sum to clients as law firms are expected to, where the interest would be used – and which legal services would benefit.
The MoJ told the Gazette that no decisions had been made on the scope of the scheme but noted that in other jurisdictions, similar schemes took interest on money that lawyers held for clients in areas of work such as conveyancing and probate.
A ministry spokesperson said: “This government is committed to improving access to justice for those that need it. We are exploring the possibility of an Interest on Lawyers’ Client Account scheme and will provide an update in due course.”