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.”