It is wrong to assume that interest paid on client funds held by law firms is somehow ‘free money’ for the Government’s taking.  

In the personal injury sector, the money is never held for very long but it does help to prop up the services firms can provide to vulnerable victims of negligence. 

People who suffer avoidable injures, including those caused by reckless drivers and negligent employers, have been on the wrong end of 25 years of reforms which have undermined access to justice and eaten away at the principle of full and fair compensation.  The Ministry of Justice’s proposals to take a share of generated interest is yet another attack on the beleaguered civil justice system.

The move will have serious implications for law firms, especially smaller ones, which use any retained interest from client accounts to offset overdraft charges and provide funding models that are better for their clients than would otherwise be possible.

There has also been no commitment from the MoJ so far to use the funds to benefit those who must turn to the civil justice system. There are also no details yet on how the scheme would be administered. The costs are likely to be a considerable burden to all involved.

John McQuater

Executive committee member

Association of Personal Injury Lawyers (APIL)