Client account proposals threaten justice access

In a recent statement, the Law Society of England and Wales has raised significant concerns regarding the Ministry of Justice's proposed scheme for Interest on Lawyers’ Client Accounts (ILCA), labelling it as fundamentally flawed and an unfair tax on clients of legal services. The proposal has prompted fears about its serious implications for access to justice, as well as its financial merit and legality. “The ILCA scheme cannot and should not proceed. The proposal is flawed, sets a damaging precedent and conflicts with wider government commitments on growth. It is not fit for purpose,” stated Law Society president Mark Evans.

The Society underscored the impact of the ILCA scheme on clients and the legal profession. Increased regulatory burdens and operational challenges could potentially lead to elevated costs for legal services, with firms forced to manage new expenses. According to Evans, “The justice system is a vital public service and the government should fund it sustainably through general taxation, not through the appropriation of client money.”

A major concern raised by the Law Society is the government's lack of transparency regarding funding expectations from the ILCA scheme. They noted that “The government have not explained how much money they expect the ILCA scheme to generate and have not guaranteed the money will go back into the legal system, as it is expected to go into the MoJ’s general budget.” This uncertainty fuels worries about the broader implications for legal aid services, particularly for vulnerable clients who may already face access difficulties.

Moreover, the Law Society pointed out that the implementation of the scheme could exacerbate existing legal aid deserts, warning that some firms may no longer be able to sustain certain services. “Our research shows vast legal aid deserts and it is clear these deserts will only increase should the ILCA scheme proceed,” they asserted.

Evans further argued that the complexity of the issues at hand warranted a more extended consultation period, stating, “Given the complexity of this consultation, which impacts nearly every solicitor’s firm and their clients in England and Wales, this consultation period should have been significantly longer, and to extend the deadline with four days’ notice is unsatisfactory.”

In conclusion, Evans reinforced the view that the justice system should be collectively funded, noting, “The justice system is a core public service that all members of society benefit from. It is fair that we all pay for this system through general taxes, in the same way that we all pay for our healthcare system, rather than patients contributing more.” This stance reflects the Law Society's position that the ILCA scheme poses more questions than answers, ultimately jeopardising crucial legal services and access to justice for many.

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