Barclays to keep client funds for barristers

Barristers will be able to keep client’s money for the first time through a third party escrow account held by Barclays Bank, the Bar Council has announced.

The account will be in the name of a company, wholly owned by the Bar Council, which will pay for itself by taking a percentage of fees withdrawn by barristers, capped at £250 per transaction.

The arrival of BARCO, scheduled for 2013, is particularly significant for public access barristers and would enable the Bar Standards Board to regulate entities. BARCO is applying to be regulated by the FSA.

Michael Todd QC, chairman of the Bar Council, described the move as “one of the most important developments in the legal services sector since the Legal Services Act came into force.”

He went on: “Demand for barristers’ advocacy and advisory services is growing all over the world. Domestic and international clients of all sizes, which regularly turn to the Bar, need a trustworthy and transparent vehicle to manage payment of their legal and litigation costs.

“BARCO puts the Bar on a level playing field, whether through the traditional referral model, offering public access services, or, in the future, structuring itself as an entity..

“It is a significant investment in the Bar’s future. It is good for clients, good for the Bar and good for competition in the legal services market.”

The new service will open for business next year after a series of roadshows in the autumn to explain its services to barristers and a pilot phase.

A Bar Council spokeswoman said that 12 sets of chambers had signed up to participate in the pilot, which is intended to last six months, but could extend to nine months if necessary.

“The service should be fully operational by the summer of 2013 at the latest,” she added.