The Ministry of Justice has opened a consultation on proposals that would redirect a substantial portion of interest earned on lawyers\u2019 client accounts to a central fund supporting legal aid and court services, prompting warnings from conveyancing professionals about potential impacts on property transaction costs.<\/p>\n
Under the proposed Interest on Lawyers\u2019 Client Accounts (ILCA) scheme, firms would be required to transfer between 75% and 100% of interest earned on pooled client accounts, and approximately 50% from individual client accounts, to government funds.<\/p>\n
The Conveyancing Association has raised concerns that the proposal fails to account for how this income currently supports operational infrastructure. According to the organisation, client account interest helps fund the compliance systems, staffing and safeguards necessary for secure fund transfers during property transactions.<\/p>\n
Beth Rudolf, Director of Delivery at the Conveyancing Association, stated: \u201cClient 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.\u201d<\/p>\n
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Rudolf added that removing this income stream would not eliminate underlying costs but would shift them to consumers: \u201cIn practice, that means higher fees for all those requiring conveyancing services and advice, and real pressure on the firms delivering conveyancing services.\u201d<\/p>\n
The Association argues that client account interest revenue covers operational expenses for ring-fenced accounts that protect transaction funds and enable smooth completion-day transfers between buyers and sellers. Without this funding source, firms may face reduced capacity to maintain existing service levels.<\/p>\n
The consultation period remains open as the Ministry of Justice gathers feedback from legal and conveyancing professionals on the proposed scheme\u2019s implementation and potential consequences for the property transaction sector.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Ministry of Justice has opened a consultation on proposals that would redirect a substantial portion of interest earned on lawyers\u2019 client accounts to a central fund supporting legal aid and court services, prompting warnings from conveyancing professionals about potential impacts on property transaction costs. Under the proposed Interest on Lawyers\u2019 Client Accounts (ILCA) scheme, […]<\/p>\n","protected":false},"author":1,"featured_media":8213,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-8212","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n