Interest Policy

1.1 This document sets out our policy for paying interest where we hold money in client account for a:
1.1.1 client
1.1.2 person funding all or part of our fees
1.1.3 trust
1.1.4 person to whom a stake is to be paid (when we hold money as stakeholder)
collectively called ‘the recipient(s)’.
1.2 We are required by the SRA Accounts Rules 2019 to:
1.2.1 have a written policy on the payment of interest that seeks to provide a fair outcome
1.2.2 pay interest when it is fair and reasonable to do so in all the circumstances
1.2.3 pay a fair and reasonable sum calculated over the whole period for which any money is held
2 Responsibility for payment of interest
2.1 The COFA is responsible for agreeing the interest rates paid to clients by the firm.
2.2 The COFA is further responsible for:
2.2.1 devising and implementing this interest policy
2.2.2 providing assistance to individuals and/or teams who have responsibility for calculating or paying interest
2.2.3 reviewing periodically the interest rates we receive and pay
2.2.4 monitoring compliance with this policy
3 When do we pay interest?
3.1 We do not pay interest:
3.1.1 on money held to pay a professional disbursement, once the intended recipient has requested that we delay in paying them
3.1.2 on money held for the Legal Aid Agency
3.1.3 on money that we have paid into a client account as an advance from the firm to fund a payment on behalf of a client or trust in excess of funds held for that client or trust
3.1.4 if we have agreed with the recipient to contract out of our obligation to pay interest
3.1.5 on monies that we are instructed to hold outside a client account in a manner that does not attract interest, e.g., cash held in our safe
3.1.6 if the amount of interest, calculated in accordance with this policy, is less than £20
3.2 We will pay interest on all other monies held on client account, including any monies we should have held on client account but failed to do so.
3.3 Interest will be calculated and paid in accordance with this policy. The amount of interest paid to each recipient will take into account:
3.3.1 the amount held
3.3.2 how long we held cleared funds
3.3.3 the requirement to provide instant access to funds held in client account
3.3.4 the rate of interest payable on the amount held in an instant access account at the bank where we have our client account
4 Types of client account
4.1 Client account monies can be held in two different ways:
4.1.1 in a separate designated client account (SDCA)—in some cases we open a separate bank or building society account for a specific client or trust, etc
4.1.2 in our general client account—this is where we hold monies for clients or trusts that are not held in an SDCA
4.2 How we calculate interest under this policy depends on which type of account is used. It is therefore important that we use the correct type of account.
5 Interest on monies held in our general client account
5.1 Any money not held in a SDCA will be held in our general client account.
5.2 Interest will be paid before deduction of tax. It will be the recipient’s responsibility to declare interest received to HMRC.
6 Best available rate
6.1 We are required by the Solicitors Regulation Authority (SRA) to deposit monies in instant access accounts only. This means that the interest rate paid on monies in an SDCA or our general client account may not be as high as the recipient can achieve by placing the money on deposit themselves. We will ensure that the recipient is aware of this and, where appropriate, has the opportunity to make alternative arrangements.
7 Interest period
7.1 Interest will be calculated over the whole period that we hold the monies, starting from the date the monies are treated by us as cleared funds.
7.2 Unless we are notified by our bank to the contrary, we will treat monies as cleared funds in accordance with the table shown below:

7.3 We will apply the same time periods when calculating the date that monies are received by the recipient.
8 Monies held on more than one matter
8.1 Where we hold monies on more than one matter for a recipient, interest will be calculated separately for each individual instruction—unless it is fair and reasonable to aggregate the interest.
9 Special cases
9.1 This policy does not apply when we act as liquidator, trustee in bankruptcy, Court of Protection deputy or the trustee of occupational pension scheme. We will comply with the appropriate statutory rules and any other relevant provisions of the SRA Accounts Rules 2019 regarding payment of interest.
9.2 If we hold money jointly with a client, the interest earned will belong to the client, unless we agree otherwise.
9.3 If we hold money jointly with another firm, we will agree with the other firm how interest will be allocated.
10 Unpresented cheques
10.1 Where we pay monies to clients by cheque, some clients will delay in paying the cheque into their bank. We will pay additional interest only where it is reasonable in all the circumstances to do so.
10.2 Where we do recalculate interest and/or issue a further cheque, we reserve the right to charge for the additional work involved.
11 Informing clients of our interest policy
11.1 We will notify clients of our interest policy in our terms of business
11.2 Failure to explain our policy on payment of interest could give the recipient unrealistic expectations about the amount of interest they will receive. Ultimately, this could lead to complaints to the firm and/or Legal Ombudsman.
12 Contracting out
12.1 Contracting out usually takes the form of agreeing that we will pay no interest or a reduced amount of interest. It can also include agreeing to pay 100% of the interest received on monies held on general client account, where this exceeds the amount that would normally be paid under this policy.
12.2 We may, by written agreement with the client and/or recipient, contract out of the terms of this interest policy.
12.3 We will only contract out where doing so provides a fair outcome. This will depend on all the circumstances, e.g.:
12.3.1 the amounts involved—the larger the sum of interest, the greater the onus on us to show that the client has been treated fairly
12.3.2 the status and bargaining position of the client—it may be less appropriate to contract out if the client is a private individual with little legal exposure than for a commercial client where the interest represents a very modest proportion of the overall transaction
12.3.3 whether there are specific reasons for contracting out, e.g. tax reasons or religious belief
12.4 When agreeing to contract out, we will:
12.4.1 act fairly towards our client
12.4.2 provide sufficient information to enable the client to give informed consent
13 Failure to comply with this policy
13.1 We are required to notify the SRA if we breach the SRA Accounts Rules 2019, including the rules relating to payment of interest. If you suspect that we have breached this policy, please report your concerns to our COFA or COLP.
14 Training
14.1 All staff will receive training, as necessary, on our interest policy including:
14.1.1 regular training for existing staff
14.1.2 training for new staff at induction
14.1.3 updates following any changes to the policy that affect staff
14.1.4 focused training for individual staff or teams responsible for specific interest actions
15 Monitoring and review
15.1 The COFA is responsible for this policy.
15.2 The COFA will monitor compliance with this policy by regular review of interest calculations.
15.3 We will review this policy regularly—at least annually. We will provide information and/or training on any changes we make.

Date of next review – 8th November 2024