Britain ‘moving with stealth’ on client accounts
Two roles have been advertised by the British government with the main duty of “unlocking funding from client interest accounts”, the England-and-Wales Law Society Gazette reports.
Britain’s Ministry of Justice is advertising for two senior civil servants to lead the government's move on client-account interest, although a final decision on the controversial policy has yet to be announced.
The MoJ advertisement for “head of additional funding policy” spells out that the job will involve developing a scheme “to unlock funding from interest generated on legal client accounts”.
Risk to law firms
The Law Society of England and Wales sharply criticised a consultation on the matter earlier this year, saying that it would put high-street law firms at risk and force legal fees to rise for those that survived.
Former Labour prime minister Keir Starmer's government had consulted on an interest on lawyers’ client accounts scheme (ILCA), but the new administration under Andy Burnham has yet to publicly revisit the policy.
The recruitment drive suggests that plans have been made to put a scheme in place, with the MoJ describing it as “our flagship programme”, the England-and-Wales Law Society Gazette reports.
The recruitment advertisement read: “This is a complex, high-profile reform that offers a rare opportunity to shape policy from primary legislation through to implementation.
“The successful candidates will play a leading role in developing and delivering primary and secondary legislation, establishing new operational arrangements, and creating a sustainable funding stream that will have a lasting impact on the justice system.”
The new recruits will work with HM Treasury as well as regulators and legal representative bodies.
'Key source of revenue'
The MoJ sees client account funding as a key source of revenue and proposed to retain 50% of the interest generated on individual client accounts, and 75% on pooled client accounts, which would be remitted into central funds.
The Law Society of England and Wales said today (24 August) that the proposal could not and should not proceed, as it set a damaging precedent.
It added its disappointment that “the MoJ appears to be moving forward with stealth.
“The proposal is a raid on clients’ money to generate an unreliable source of revenue for the justice system and to address general budget shortfalls.
“It would fundamentally change the rules of the game by making the MoJ a tax-raising department funded through clients of legal services,” said Law Society vice-president Brett Dixon.