OUR POLICY FOR ACCOUNTING TO CLIENTS FOR INTEREST ON MONEY HELD ON CLIENT ACCOUNT

1.           Introduction

 

This policy sets out how Barker Gooch & Swailes apply interest in relation to funds held in our client account, in accordance with regulatory requirements. Barker Gooch & Swailes is committed to compliance with its obligations under the Solicitors Regulation Authority (SRA) Standards and Regulations including Rule 7 of the SR A accounts Rules 2019.

 

2.           Background

 

It is our policy to account to our clients for interest on a basis which is fair and reasonable to both to our clients and to our firm. Our policy takes into account the fact that money must be immediately available unless there is a clear agreement to the contrary and takes into account general management costs.

 

As required under the regulations, Barker Gooch & Swailes must ensure that client money is kept safe; available for the purpose for which it is provided and separate from funds belonging to the firm.

Client money must be held in a client account as defined by the Banking Act. In doing this, funds are protected from being used to cover any liability to the bank by the firm.

 

There are two types of client account:

 

2.1        A general client account where most client money is held. This is on an instant access basis to ensure immediate access to funds and means it is unlikely you will receive as much interest on money held as might have been obtained had you held and invested the funds yourself.

 

2.2       A designated client account. This account is set up specifically for an individual client matter and will include in its title a reference to your identity. Such accounts are sometimes set up when there are specific contractual requirements to do so, such as a rent deposit.

2.3       There may be extra costs involved in setting up and managing a designated client account

 

2.4       Barker Gooch and Swailes will not place clients money in a designated client account unless a specific written agreement to do so is reached with the client beforehand.

 

3.           Application of interest for client funds held

 

3.1       Where money is held in a designated client account we will account to you for all the interest earned on that account (net of any tax deducted at source).

 

3.2       Where money is held in a general client account or is money under our control which should have been held in a client account but was not, we will account to you for interest when it is fair and reasonable to do so in all the circumstances having regard to the principles and practices as detailed below.

 

3.2.1   In order to avoid excessive management costs interest will be paid on the relevant balance from time to time without obligation to compound the same at regular intervals.

 

3.2.2  We will normally calculate and pay interest once your matter has been concluded. However, there may be instances where it might be more appropriate to account for interest at intervals throughout the matter.

 

3.2.3   Due to regulatory requirements and administrative costs involved we will not pay interest if the sum calculated is less than £50 in total for the full period during which we hold your money in client account or if upon file closure there is less than £5 due.

 

3.2.4   We reserve the right to set off any interest due to you against any amounts due to us.

 

3.2.5   We will retain interest paid to us by the bank on the aggregate of all client money held in the general client account.

 

3.2.6   We will not pay interest on money held:

 

(a) For payment of a professional disbursement once counsel or other professional has requested a delay in settlement.

 

(b)  On an advance from us into our general client account to fund a payment on your behalf in excess of funds already held for you in that account.

 

(c)  If there in an agreement to contract out of the provisions of this policy.

 

4.           Calculation of interest payable

 

Interest will be calculated and paid to the client at the rate at which money held on our general client account earns interest from time to time over the period for which we hold cleared funds.

 

Unless otherwise agreed, where we are conducting more than one matter for you, balances will not be aggregated for calculation purposes.

 

5.           Review

 

This policy will be reviewed from time to time to ensure that it continues to deliver a fair outcome to clients.

Interest Policy

(SD - Probate and Administration of Estates - policies and procedure)

Updated 08 04 24