Interest Policy on client account funds
This policy explains how Sterling Lawyers Ltd. (the “firm”) handles interest on client funds. In accordance with the Solicitors Accounts Rules 2019, our aim is to provide a fair and reasonable approach for both our clients and the firm.
Placing Funds in Client Account
When we receive money on your behalf, it will be paid into our general client account with Barclays, our designated bank. We may change our banking arrangements at any time and will notify you in writing if we move your money to another bank. Our general client account holds combined funds for various client matters and is maintained as an instant access account to facilitate efficient transactions.
Clients should note that the interest earned in our general client account may be lower than what could be obtained by holding or investing these funds personally.
Payment of Interest
If we hold your funds in our general client account or if we should have done so, we will, where appropriate, pay you a sum equivalent to interest (calculated gross).
We will not pay interest in the following circumstances:
a. If the total amount of interest due is £150.00 or less. We consider that the administrative costs of processing such a small amount would exceed its value.
b. On funds held to cover a professional disbursement if the recipient of those funds requests a delay in settlement.
c. On any advance we make from our own resources to the general client account to cover a payment on your behalf that exceeds the funds we hold for you.
d. Where there is a written agreement to opt out of this interest policy.
We typically calculate and pay interest upon completion of your matter unless interim payments are appropriate (for example, in certain long-running private client matters).
The amount of interest we pay depends on what is fair in the current financial/economic climate. If conditions are poor, we may not pay interest at all.
We regularly review the rates of interest we apply and will do so whenever the Bank of England changes its Bank Rate.
When calculating the period over which interest applies, we consider the time from when the funds have cleared into our account until the day we send funds electronically or, if sending by cheque, five days after the cheque is raised.
Tax and Other Considerations
Interest is paid gross, and it is your responsibility to declare this to HM Revenue & Customs (HMRC).
The interest paid to the firm on the overall balance of the general client account (after accounting for any interest paid to clients) belongs to the firm.
Review of Policy
This policy is reviewed periodically by the Compliance Officer for Finance and Administration (COFA) and the partners of the firm.
