Chambers sign up to escrow account pilot after FSA gives green light

Print This Post

10 January 2013


Todd: imaginative and unique solution for clients all over the world

Ten chambers have signed up to the pilot of Barco, the Bar Council’s third-party escrow account that will allow barristers to handle client money.

It follows the Financial Services Authority (FSA) granting regulatory approval for the service under the Payment Services Regulations.

Announced in September, Barco will enable funds to be held in a ring-fenced account with Barclays. Interest will be returned to clients; if it were not, Barco would change from a payment institution into a bank, with all the heavy regulation that would ensue.

The FSA’s approval paves the way for Barco’s pilot phase ahead of a full roll-out in spring 2013.

Chambers from across the country and a range of practice areas will take part: Atkin Chambers, 2 Bedford Row, 33 Chancery Lane, Erskine Chambers, 39 Essex Street and Outer Temple Chambers (all in London), St Johns Buildings (Manchester), St Johns Chambers (Bristol), 37 Park Square (Leeds) and St Philips (Birmingham).

Michael Todd QC, chairman of the Barco committee and immediate past chairman of the Bar, said: “I am delighted that the FSA has granted approval to Barco. We believe that it will offer an imaginative and unique solution for clients all over the world, making it easier than ever before to work with the Bar, whilst maintaining the Bar’s high quality and cost-effective services.”

Barristers using the scheme will have to incorporate its standard contract in their own terms and conditions; part of this is that all money passing from the client, including legal fees, has to go through the account. The contract has to be sent to Barco and if it is not received within 48 hours of the money being transferred, it will be returned.

When the barrister gives an instruction to pay out money, the client will be notified and, absent their express approval, will have five days to dispute it. One of the goals of the pilot will be to determine a level of funds to be paid out at which express authority will be automatically required.

There will be a percentage charge on the barrister’s fees when they are paid, capped at £250 per transaction. In the medium term the Bar Council hopes to raise a surplus off this fee to make a profit and keep practising fees down.

The pilot is being watched closely by the solicitor side of the legal profession while reviews of client account are being conducted by both the Solicitors Regulation Authority and Law Society.

 

Tags: , ,



Leave a comment

* Denotes required field

All comments will be moderated before posting. Please see our Terms and Conditions

Legal Futures Blog

GDPR and the rise of ‘datanapping’ – the new threat to the pockets of law firms

Nigel Wright

You’ve heard about ransomware – a hacker infiltrates your IT systems, locking them down until you pay a ransom. Some studies now estimate that over 50% of businesses have experienced this type of attack in the last year, and it’s particularly prevalent within the legal sector. Previously, firms could protect themselves by having a solid disaster recovery plan in place to ensure they can get back up and running in the event of a disruption. However, the General Data Protection Regulation (GDPR) – the new EU-wide regime which comes in effect on 25 May 2018, irrespective of Brexit – means that this approach alone is no longer adequate and security measures must be strengthened to prevent attacks.

April 21st, 2017