Interest Policy
CLIENT MONEY INTEREST POLICY
- Scope and Definitions
This policy applies to all client money held by Proctor Moore Solicitors in connection with legal services provided in England and Wales.
Definitions:
• Client Money: As defined by the SRA Accounts Rules 2019, money held or received for a client or as trustee.
• General Client Account: A general client account where funds from multiple clients are held together.
• Designated Client Account: A separate account opened specifically for an individual client, where interest accrues directly to that client.
- Purpose
• This policy ensures compliance with the SRA Accounts Rules 2019 (Rule 7) and the fair treatment of client money held in our client accounts.
- When Interest Must Be Paid
We will account to clients for interest where:
• A single payment of £1,500 or more is received into the client account; and
• The funds from that single payment are held for a period exceeding 8 weeks.
This policy does not apply to the cumulative effect of multiple or ongoing payments received for the running of a case. It applies only to discrete, one-off sums, for example, those received for a house purchase, probate, or similar transactions.
If both criteria are not met, no interest will be paid. The rationale for not paying interest in such cases will be documented.
Where the firm reasonably anticipates at the outset that a single payment of £1,500 or more will be held for a period exceeding 8 weeks, the firm may, at its discretion, account to the client for interest before the expiry of the 8 week period. The decision to pay interest earlier in such circumstances is at the firm’s discretion and will be based on the specific facts of the matter.
- When Interest Is Not Paid
Interest will not be paid if:
• The amount held is less than £1,500; and/or
• The funds are held for 8 weeks or less; and/or
• The client has agreed in writing, on an informed basis, that no interest is payable; and/or
• The amount calculated is considered de minimis or where the cost of calculating and administering the interest payment would exceed, or be disproportionate to, the interest due. The rationale for such decisions will be documented; and/or
• Where the firm has incurred costs, expenses, or other liabilities in relation to the client’s matter which exceed the amount of interest calculated as payable to the client, the firm may determine that no interest is payable, or may set off the interest against those costs, where it is fair and reasonable to do so and in accordance with retainer and agreed terms with client. The firm will document the rationale for any such decision and inform the client in writing.*
- For the purposes of this Interest Policy, the phrase “costs incurred in relation to the client’s matter” refers to any fees, charges, or expenses that the firm has properly incurred in the course of providing legal services to the client. This includes, but is not limited to:
• Professional Fees: Solicitors’ fees for legal work undertaken on the client’s behalf, whether billed or unbilled at the relevant time.
• Disbursements: Payments made or to be made to third parties in connection with the client’s matter, such as court fees, counsel’s fees, search fees, Land Registry fees, or expert reports.
• Administrative Charges: Any agreed administrative or processing fees directly related to the management of the client’s matter.
• VAT: Any applicable Value Added Tax on the above fees or disbursements.
Exclusions:
Such costs do not include the administrative costs associated solely with the calculation or payment of interest on client money, which are addressed separately within this policy.
Application:
Where the total costs incurred in relation to the client’s matter exceed the amount of interest calculated as due to the client, the firm may set off the interest against those costs, or may determine that no interest is payable. In all such cases, the client will be informed in writing of the decision and the rationale.
- Calculation Method
• General Client Accounts:
Where interest is payable on money held in the general client account, the firm will account to the client for 50% of the interest actually earned on the relevant client account during the relevant period. The firm considers this to be a fair and reasonable sum, reflecting the general tax, administrative, operational and compliance burden associated with holding and managing client money. No separate charge is made to the client for calculating interest.
• For the avoidance of doubt, this 50% deduction is distinct from any costs incurred in relation to the client’s matter as reference in section 4.
• Designated Client Accounts:
Where funds are placed in a designated client account, interest will be paid to the client in full at the actual rate earned on that account. The 50% deduction referred to above applies only to general client accounts and does not apply to designated client accounts. Interest on a designated client account remains subject to the eligibility criteria in section 3 and may be reduced or set off against costs in accordance with section 4.
• Calculation Period:
Interest is calculated on cleared funds only, from the date the funds are received until the date of payment out.
• Payment Timing:
Interest will be calculated up to and including the date on which funds are released to the client or on the client’s behalf. The firm is not obliged to calculate or pay interest to the client on an interim basis (for example, weekly, monthly, or quarterly) while funds remain in the client account. This approach is adopted to avoid unnecessary administrative work and costs associated with frequent adjustments, and to ensure that interest is paid in a fair and efficient manner at the conclusion of the period during which the funds are held.
For the avoidance of doubt, where client money is held for an extended period (for example, over a year), interest will be calculated and paid in a single sum at the time the funds are released, unless otherwise agreed in writing with the client.
Notwithstanding the above, the firm may, at its discretion, pay interest to the client ledger prior to the release of funds, where it considers it appropriate to do so. In exercising this discretion, the firm will have regard to the additional administrative work and costs involved in making interim interest payments. There is no obligation on the firm to make such interim payments unless specifically agreed in writing with the client.
• Review:
The interest rate and calculation method are reviewed annually to ensure fairness and compliance with regulatory requirements. - Flexibility for Exceptional Cases
In exceptional circumstances, where the application of this policy would result in unfairness to the client, the firm reserves the right to pay interest on a different basis at its discretion. - Client Communication
• Clients are informed of their right to request that their funds be placed in a designated interest-bearing account at any time.
• A copy of this Interest Policy is available on request. - Record-Keeping
• All interest calculations and decisions (including the rationale for not paying interest) are documented and retained for six years in accordance with the firm’s data protection policy and SRA requirements.
• The Compliance Officer for Finance and Administration (COFA) is responsible for ensuring compliance with this policy. - Policy Review
• This policy is reviewed annually by the COFA (or their delegate) and updated as necessary to reflect regulatory or market changes. - Example Scenarios
- £400 held for 2 months: No interest (below threshold). Document decision.
- £10,000 held for 5 weeks: No interest (not held for more than 8 weeks). Document decision.
- £20,000 held for 1 year no costs incurred in relation to the matter: Pay interest at 50% of the interest rate earned on the client account.
- £20,000 held for 1 year however costs incurred in relation to the matter: No interest paid — costs incurred exceed the interest calculated (set off per section 4).
- £50,000 held for 1 year, client waived interest: No interest paid. Document client’s written agreement and rationale.
Updated 2026.
