Solicitors warn on Britain’s client-accounts plan
The British government has unveiled a plan for three-quarters of the interest earned on pooled client accounts to go towards funding a “sustainable justice system”, according to the England and Wales Law Society Gazette.
Opening a consultation on the 'interest on lawyers' client accounts scheme’, justice minister David Lammy said that “unearned income” should be invested in strengthening the justice system.
“Law firms thrive when the system is strong, so it follows that they should contribute to strengthening justice,” he said.
Fees warning
Under the proposals, 50% of the interest generated on individual client accounts would be remitted to government.
The Gazette says that the consultation is open for an “unusually brief” five weeks, closing on 9 February.
The Law Society of England and Wales immediately criticised the plan, saying that it would put high-street law firms at risk and force legal fees to rise for those that survived.
‘Serious consequences’
Society president Mark Evans said: “The MoJ has decided to take money from the interest earned on law firms’ client accounts to boost its own budget.
“Yet, as its own consultation reveals, it has no clear idea how this proposal will work in practice and no understanding of the serious consequences this will have on high-street firms and access to justice throughout England and Wales,” Evans stated.
“Firms will close, fees will rise and clients will be impacted if the MoJ goes ahead with the proposal,” he concluded.
At the moment, client funds are subject to Solicitors Regulation Authority rules, under which firms must account to clients for a “fair sum” of interest earned.