The CLSA response to the Consultation on a Proposed Interest on Lawyers’ Client Accounts (ILCA) Scheme

The Ministry of Justice (“MoJ”) has launched a consultation on a proposed Interest on Lawyers’ Client Accounts (ILCA) Scheme. The response deadline has been extended until 11:59 pm on 9 March 2026

Key elements of the proposal include:

• Remittance of interest from client funds to government:
  • 75% of interest on pooled client accounts
  • 50% of interest on individual client accounts

  • The interest collected would not be ring-fenced for specific legal access-to-justice programmes, but pooled into the MoJ’s central budget to help strengthen the justice system.
  • Firms would still hold client money, but new reporting and remittance requirements would apply, including calculation and periodic payments of interest to the scheme administrator (proposed to be the MoJ).
  • The consultation invites evidence and views from legal service providers, regulators, clients, consumer groups, banks, and others on operational and financial impacts.
  This represents a significant intervention in how client account interest is treated under tjeshe current legal services regulatory regime. It will have a considerable impact on the profitability of some firms. The CLSA, as it does on all important consultations, has submitted a response on behalf of members and it can be accessed here.

  The Consultation link is Interest on Lawyers’ Client Accounts Scheme – GOV.UK