Conveyancers have warned that the Government’s proposals to redirect interest earned on client accounts into a central justice fund could increase buying costs and introduce delays into already stretched property transactions.
The Ministry of Justice is consulting on a new Interest on Lawyers’ Client Accounts (ILCA) scheme that would require firms to transfer a large share of interest earned on client money to support legal aid and court services. For pooled client accounts, between 75% and 100% of interest could be taken, while around 50% would be removed from individual client accounts.
running costs
The Conveyancing Association (CA) says this income is not spare cash, but helps cover the cost of running ring-fenced client accounts that protect transaction money and allow funds to move smoothly from buyer to seller on completion. Without it, firms would have less capacity to fund compliance systems, staffing and safeguards that underpin fast, secure transfers.
Client account interest is not a spare pot of money that can be simply taken away from firms without consequences.”
Beth Rudolf (pictured), Director of Delivery at the CA, says: “Client account interest is not a spare pot of money that can be simply taken away from firms without consequences. For conveyancing firms, it plays a real role in funding the systems, controls and checks that protect consumers and allow transactions to proceed safely.”
She adds: “Removing it does not make those costs disappear, it simply shifts them elsewhere and adds in additional administration costs. In practice, that means higher fees for all those requiring conveyancing services and advice, and real pressure on the firms delivering conveyancing services.”
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