The Law Society has hit back at what appear to be plans to introduce the proposed Interest on Lawyers’ Client Accounts (ILCA) scheme, after a role was advertised by the Ministry of Justice (MoJ) recruiting for a role to deliver “sustainable funding for critical justice services and helping ensure access to justice”.
The Law Society said it was disappointed to see the government is “moving forward with stealth” on ILCA with the placement of the ad.
“Despite universal opposition from the legal profession, the Ministry of Justice UK is advertising a role that indicates the government is moving forward with the ILCA scheme”, it said in a statement.
As reported by The Law Society Gazette, an ad seeking a head of additional funding policy role was published on the MoJ website in August. The role is described as sitting “at the centre of one of the Ministry of Justice’s top priorities: securing sustainable funding for critical justice services and helping ensure access to justice”, with the holder responsible for supporting “the design, legislation and implementation of a new scheme to unlock funding from interest generated on legal client accounts”.
The consultation into the ILCA proposals, which closed in March, proposed remitting a proportion of the interest earned on client accounts in England and Wales, including third party managed accounts, to the government. The money would then be used to fund access to justice, including legal aid. Firms would retain a portion of the remaining interest, which would continue to be subject to existing sectoral rules on client interest.
The Law Society has been robust in its opposition since the proposals were mooted and the consultation launched, describing them as “fundamentally flawed, lack(ing) adequate evidence and… a crude sector-specific tax on clients of legal services”.
The scheme “cannot and should not proceed”, the Law Society said, reiterating its position that the proposals are “flawed and set a damaging precedent and conflicts with wider government commitments on growth”.
The statement concluded: “We are still waiting for the outcome of the consultation. The government’s proposal is a raid on clients’ money to generate an unreliable source of revenue for the justice system and to address general budget shortfalls.
“It would fundamentally change the rules of the game by making the MoJ a tax-raising department funded through clients of legal services.
“The scheme sets a precedent for solicitors’ firms and clients that does not apply to other industries. ILCA was never a sensible solution and should not be implemented.”
