MoJ set to force through client account interest plan whatever the impact

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By Legal Futures

17 November 2010


Banking on interest: MoJ expects minimal impact on solicitors' fees

The government will push ahead with plans to take client account interest and apply it to the legal aid fund irrespective of the possible impact on clients and solicitors.

An equalities impact assessment published to accompany the Ministry of Justice’s (MoJ) proposals says that though some firms may decide to pass on any lost income to their clients through higher charges, “this risk has not been quantified at this stage and is expected to be minimal”. As a result, no equalities impact has been assessed as yet.

The MoJ added that because it does not currently have a sense of how much money is kept in client accounts, it has not been able to quantify the lost income that this would represent to firms, and again it has been unable to identify what differential impacts it could have.

In any case, the assessment said that even if “contrary to our expectations” the proposals were to have an adverse impact in terms of sex, race or disability on clients and/or solicitors, “it is our initial view that any such impacts would be justified”.

It explained: “The government is committed to controlling public expenditure and to reforming the legal aid system. Using the interest received by solicitors on the money that they hold on behalf of clients to contribute towards the cost of legal aid would supplement the legal aid fund (and possibly in the long term alleviate or offset the demands on the public purse).

“In addition, we consider that securing the interest on client accounts, a measure which provides an additional source of funding from the legal profession itself, with no detriment to legally aided clients, and which been successful elsewhere, is likely to be a proportionate means to achieve this objective.”

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