>£300k of our money has been in a solicitor's bank account for six months. Are we due any interest?

[tulippa]

My DB and I have been waiting a while for the estate our late DM to be finalised. This has now at last been sorted but the final account summary makes no mention of interest that may have accrued on funds held by the solicitor while they faffed about liaised with the DWP for half a year.

When we queried this they said they would take the first £20 for admin costs (fair enough) and that the amount we would have to pay them to calculate the interest owed would probably be more than the interest itself. Does this sound right? It would take me less than a minute to work this out if I knew the rate of interest that would be applied. Does anyone know the typical rate for a solicitor's account? Then I can see whether it would be worth referring this to the SRA.

Thanks.

Sounds like a fob off to me. Cheeky buggers.

Does your engagement letter with them say nothing about the rate of interest paid?

Yes gamerchick I thought that too!

No yonicscrewdriver it doesn't. DB checked it and it mentions the admin fee but nothing else. I can't work out if it's linked to Bank of England base rate or something else. I found some general information (not about this solicitor) but it was from 2007 when interest rates were much higher.

This sounds wrong. Solicitors are strictly required to ring fence client money in a separate account. Any interest arising on your 300k will be in that client account. It is typical for the client account to be low interest. The £20 admin also sounds fine but not a fee to "calculate the interest". That's the fishy but. It is illegal for the solicitor to move client money to his/her own account unless you instruct them to. This sounds dodgy. You might want to tell the SRA who are slow but helpful when they do get to your file

Well interest rates are crap at the minute. They're not going to have had it in a savings account but in an instant access type thing as they'd have needed it immediately available when it was all sorted.

So the interest on a current account is what 0.2%?

I really can't see it being a sum worth bothering about.

£600 over a year, so £300 over 6 months. Unless my maths are wrong that's a sum worth bothering about.

Viva yes it's hard to work out if I should pursue this without knowing the rate - if it is 0.2% that's £300 which may not be much compared with the total amount but if they're doing this to every client they could be receiving a lot of money that isn't technically theirs.

HandMini I think the fee to calculate the interest is for their time - and it takes takes them a long time to do most things apparently.

Cross post HandMini - yes was wondering if I'd worked that out correctly too!

I get that, but you can ask them for a breakdown of the time they spend on anything. And without wishing to sound snobby, if this is a small/mid size or high st firm, it will cost nowhere near 300 to do this calculation. If it's a big firm they would have a billing department to do this. I am a solicitor so I'm not in the business of underselling what I and my fellow solicitors do, but this just feels fishy. They should want to get all money out of the client account.

Think will call them on Monday and ask what the interest rate is - then I can do my own calculations and refer to SRA if necessary. Thanks for the replies everyone!

The solicitors accounts rules say that they must pay you interest on any funds that have been in their client account for a certain period of time. ( can't remember of the top of my head) my firm do this automatically in every case and we never charge a client for doing so. Quite often we have to send clients cheques for very small amounts of money to make sure we do not breach the rules. I would write to them and ask them to pay. If they refuse I would send them a copy of the rules( I'm sure they will be available on google). As a last resort you could ask the Law Society for help/ advice on this.

Just speak to their accounts department. I suspect you've spoken to an NQ solicitor who doesn't know what they're talking about. The solicitors can't keep the money anyway it's in a separate client account pot and is ring fenced. If any money is unclaimed and untraceable they still can't keep it. I recall sending stamps to clients once because the money we owed them was about 60p but it still had to be handed over.

This is not my firm but a reputable one and it shows their approach to interest on client account monies.

www.shoosmiths.co.uk/6174.aspx

I suspect yours has been in a general account and there's very little interest.

www.sra.org.uk/solicitors/handbook/accountsrules/part5/content.page

This is the SRA guidance for solicitors

Lots of really useful information - thanks! Wasn't sure if I was being petty or not. I'll contact them again to clarify their position and let the SRA know if they're not adhering to the guidelines.

You shouldn't have to ask for interest to be paid over. They are obliged to make payment to you without you having to ask, and they shouldn't charge you for the privilege, although they are entitled to make a small deduction for admin costs (usually this results in a lower percentage being paid out).

If they don't account for interest, this is a breach of the Accounts Rules.

They can't charge you for calculating the sum due.

Also, as far as I am aware, they can't charge an "admin fee".

Our client account at work (large law firm) is currently paying 0.01% so you would get £15 for six months and that's before tax. Client account interest is paid gross so you would have to notify HMRC and pay tax or pay solicitors to do it for you.
And getting a response from DWP in 6 months is pretty good; last time I dealt with them it took 14 months to get a reply.

I am afraid low rates are pretty standard. My pension fund has just announced its new interest rate on cash sums - it is 0% !!!! So I suspect here the sum of interest is likely to be under £20 and therefore on the shoosmiths link above likeyl to be so small the firm is entitled to decide it is not necessary to pay it to you or work it out:
"Due to the administrative costs involved we will not pay interest if the sum calculated is less than £50 in total for the full period during which we hold your money in client account.
We will retain interest paid to us by the bank on the aggregate of all client money held in the general client account. "

I would be surprised if the Shoosmiths' rules do not comply with the rules so suspect you will not be entitled to anything simply because the firm will have made virtually no interest these days. In fact the Bank of England is considering reducing interest rates at the moment below 0.5% base rate. This so different from much of our livse. I remember when the UK had inflation of 60% over 3 years in the 1970s.