Policy on payments in lieu of interest on monies held in a client account
LFBB has a policy on payments in regards to paying an amount in lieu of interest (“interest”) to clients where the firm holds money in a general client account on their behalf in the course of providing legal services.
The rate of interest the firm pays on such funds fluctuates depending upon the rate of interest that the firm can secure from its principal bankers.
The firm does not pay the full rate of interest which it earns on general client funds to clients because this is an enhanced rate that the firm can secure from holding large levels of client funds in aggregate. However the firm does pay a rate of interest to its clients that is available to clients in the open market through a business instant access account or a designated client account.
The firm believes this is a fair and reasonable approach; enabling clients to earn interest where appropriate and simultaneously providing the firm with a return for administering and managing client funds.
- If we hold money in a separate designated client account on your behalf, we will account to you for all the interest earned on that account.
- If we hold money in a general client account on your behalf, or if money should have been held on your behalf but was not, then we will account to you for a sum in lieu of interest calculated as below.
- We will not account to you for any interest in the following situations: if the amount calculated is £20 or less;
- On money held for the payment of a professional disbursement if the person to whom the money is owed has requested a delay in settlement;
- On money held for the Legal Services Commission;
- On an advance from us into our general client account to fund a payment On your behalf in excess of funds already held for you in that account;
- If there is an agreement to contract out of the provisions of this policy.
- If we hold sums of money intermittently on your behalf, in our general client account, during the course of acting, and the sum in lieu of interest calculated for any single period is £20 or less, we will account to you if the total interest exceeds £20.
- If money is held for a continuous period, and for part of that period it is held in a separate designated client account, we will account to you for a sum in lieu of interest for the rest of the period when the money was held in a general client account regardless of whether it is less than £20.
- We will calculate and pay interest once your matter has been concluded.
- In calculating interest we will apply a rate that we believe reflects the market rate of interest paid on an instant access current account offered by our bank over the period when interest is due. We will publish interest rates, together with this policy, on our website.
- We will review the interest rates quarterly and also whenever the Bank of England changes its Bank Rate.
- In determining the period over which interest is to be calculated, we will look at the following: the period between the date when the relevant funds received by us clear our account and, if we send the funds electronically, the date when the funds are sent or, if we send the funds by cheque, five days after a cheque is raised.
For more information on our Policy on Payments In Lieu Of Interest Policy, call us on 0114 272 9721 or click here to contact us.