Hayhoe: Consumer voice has been missing from client interest debate
A majority of clients believe that they should keep interest earned on client accounts, research for the Legal Services Consumer Panel (LSCP) has found.
Its annual tracker survey also showed that nine out of 10 consumers were satisfied with the service they received from legal services providers and 91% with the outcome – the first time satisfaction rates have hit 90% since the research began in 2012.
In January, the Ministry of Justice (MoJ) launched a consultation on an interest on lawyers’ client accounts (ILCA) scheme, which would transfer 75% of the interest on pooled client accounts and 50% on individual accounts to the government.
The plans are strongly opposed by the legal profession and have been described as a “stealth tax” on consumers. The outcome of the consultation is awaited.
Three-quarters of consumers told the LSCP that they were aware that legal service providers could hold clients’ money while a matter was ongoing.
Just over half of them (52%) said any interest earned should be paid directly to the individual client.
One in five (22%) believed the interest should instead be used to fund free legal advice and support services and only 4% that law firms should be able to keep the money.
A quarter (23%) said they “did not have a strong view” on the issue. Consumers were not asked if they believed the money should go to the MoJ.
“The findings suggest there is no clear consumer consensus regarding the use of interest generated from client money, highlighting the importance of transparency and consumer understanding in this area,” researchers said.
The LSCP called on the Solicitors Regulation Authority to commission “comprehensive research” on the issue – “equally important to know is whether consumers accurately understand what is happening to their interest”.
The research found that satisfaction with legal services had risen steadily from 79% in 2012 to 90% in 2026, and 91% with outcome. Consumers were most satisfied by service and outcome when using will writing and power of attorney services, while criminal law clients were the least satisfied.
Funding was an indicator of satisfaction – with lower levels among those using a no win, no fee arrangement or third-party litigation funding – as was choice. Those who had a choice of lawyer were happier than those who did not.
Three-quarters of consumers (73%) stated that the service and advice they received was “good or very good value for money”, the same as in 2025.
The tracker survey was commissioned from MEL Research, which gathered responses from 3,802 people who had used legal services in the last two years.
Three-quarters of consumers (76%) said they trusted lawyers to tell the truth, while 78% said they trusted them to keep their money safe.
The proportion of consumers shopping around before choosing a legal service provider fell by 2% to 42% in 2026.
Only half of consumers (51%) said they knew how to complain if dissatisfied with a legal service. A further 27% were not certain.
The proportion of clients who were dissatisfied but did nothing about it rose sharply in 2026, from 28% to 40%, while those who made a formal complaint to their law firm fell from 20% to 14%.
However, the proportion who complained informally rose by six percentage points to 31%.
Consumers were most likely to say they would not complain directly to their legal services provider because they were concerned how the provider would react (27%).
Meanwhile, the proportion of consumers opting for unbundling fell slightly in 2026, from 21% to 19%.
Consumers using legal services for employment disputes were most likely to use unbundling (32%), followed by those with problems as a landlord (31%) and probate matters (27%). The probate figure fell sharply from 39% in 2025.
Tom Hayhoe, chair of the Legal Services Consumer Panel, commented: “The consumer voice has been missing from the sector’s discussions around the treatment of the interest accrued on client money being held in lawyers’ client accounts and this has to change.
“Other professions do not retain such interest but treat it as belonging to the client. Dedicated consumer research would help regulators and the profession understand what consumer expectations are.”
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