Interest will be calculated over the whole period that we hold the monies, starting from the date the monies are treated by us as cleared funds.
Unless we are notified by our bank to the contrary, we will treat monies as cleared funds in accordance with the table shown below:
When are monies treated as cleared funds
4 working days after the money has been paid into our client account
date of actual receipt into the account
the following working day
We will apply the same time periods when calculating the date that monies are received by the recipient.
Monies held on more than one matter
Where we hold monies on more than one matter for a recipient, interest will be calculated separately for each individual instruction—unless it is fair and reasonable to aggregate the interest.
Payment dates
Interest will be paid at the conclusion of the retainer or on an annual basis if monies are held for longer than 12 months.
Special cases
This policy does not apply when we act as liquidator, trustee in bankruptcy, Court of Protection deputy or the trustee of occupational pension scheme. We will comply with the appropriate statutory rules and any other relevant provisions of the SRA Accounts Rules 2011 regarding payment of interest.
If we hold money jointly with a client, the interest earned will belong to the client, unless we agree otherwise.
If we hold money jointly with another firm, we will agree with the other firm how interest will be allocated.
Unpresented cheques
Where we pay monies to clients by cheque, some clients will delay in paying the cheque into their bank. We will pay additional interest only where it is reasonable in all the circumstances to do so.
Where we do recalculate interest and/or issue a further cheque, we reserve the right to charge for the additional work involved.
Informing clients of our interest policy
We will notify clients of our interest policy in our terms of business.
Failure to explain our policy on payment of interest could give the recipient unrealistic expectations about the amount of interest they will receive. Ultimately, this could lead to complaints to the firm and/or Legal Ombudsman.
Contracting out
Contracting out usually takes the form of agreeing that we will pay no interest or a reduced amount of interest. It can also include agreeing to pay 100% of the interest received on monies held on general client account, where this exceeds the amount that would normally be paid under this policy.
We may, by written agreement with the client and/or recipient, contract out of the terms of this interest policy.
We will only contract out where doing so provides a fair outcome. This will depend on all the circumstances, eg:
the amounts involved—the larger the sum of interest, the greater the onus on us to show that the client has been treated fairly
the status and bargaining position of the client—it may be less appropriate to contract out if the client is a private individual with little legal exposure than for a commercial client where the interest represents a very modest proportion of the overall transaction
whether there are specific reasons for contracting out, eg tax reasons or religious belief
When agreeing to contract out, we will:
act fairly towards our client
provide sufficient information to enable the client to give informed consent
Failure to comply with this policy
We are required to notify the SRA if we breach the SRA Accounts Rules 2011, including the rules relating to payment of interest. If you suspect that we have breached this policy, please report your concerns to our COFA or COLP using the process described in our separate Compliance failure policy.
Training
All staff will receive training, as necessary, on our interest policy including:
regular training for existing staff
training for new staff at induction
updates following any changes to the policy that affect staff
focused training for individual staff or teams responsible for specific interest actions
Monitoring and review
The COFA is responsible for this policy.
All staff must be aware of and adhere to it. You may be liable to disciplinary action if you fail to comply with the provisions of this policy or related policies and procedures.
The COFA will monitor compliance with this policy by peer reviews on file and a regular review of interest calculations.
We will review this policy regularly – at least annually. We will provide information and/or training on any changes we make.
We will review this policy regularly – at least annually. We will provide information and/or training on any changes we make.
