Interest Policy

This policy sets out how we deal with interest on money held by Browell Smith and Co Solicitors Ltd (the firm) for a client. In accordance with the Solicitors Accounts Rules 2019, it is the firm’s policy to account to its clients for interest on a fair and reasonable basis for both the client and the firm.

When monies are received on behalf of the client, it will be paid into general client account currently with Virgin money who are the firm’s bank. The general client account will hold pooled amounts for different matters for its clients. These are held on an instant access account to facilitate the transaction.

Our client ledgers will be reviewed regularly. We will put client funds into a designated deposit account if funds are to be held longer than 28 days and more then £50,000. Otherwise the below will apply.

If client monies are held in a separate designated deposit account (i.e. a specific bank account, for a specific matter) all interest earned on that account will be credited to that bank account and paid to the client in full (subject to any applicable withholding tax).  We will only transfer funds to a Designated Deposit Account on request, provided that, in the opinion of Browell Smith and Co Solicitors Ltd’s Accounts Department it is equitable to do so, taking into account amongst other factors, the administrative cost of doing so.

Clients are unlikely to receive as much interest as might have been obtained had they held the funds and invested the money by themselves

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 (gross) calculated as below.

We will not account to you for any interest in the following situations:

1. if the amount calculated is £75 or less. We believe this is a fair sum, as required by Rule 7 of the SRA Accounts Rules, as–
   The level of interest we receive from our bank, which is significantly different to, for example, the Bank of England  Base Rate; and
   Offering a lesser rate than the rates paid by banks and not paying interest, unless it is calculated to be more than £75.00, takes into account the cost/time expended in managing the client account.
2. 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;
3. 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;
4. if there is an agreement to contract out of the provisions of this policy.

Our obligations for accounting interest to you for the following situations:

1. We will usually calculate and pay interest once your matter has been concluded unless interim payments are appropriate (for example in long running private client matters).
2. 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 a UK high street bank. We will publish interest rates, together with this policy, on our website at browells2.urdev.co.uk. Currently 2%
3. We will review the interest rates quarterly and also whenever the Bank of England changes its Bank Rate.
4. 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.

Rate used on balances

The firm’s accounts department will prepare the calculation as instructed by the fee earner.

Interest is paid gross and it is the client’s responsibility to declare gross interest received to HMRC.

Interest is paid by Virgin money to the firm on the aggregate of all client money held in the general client account and, subject to any interest paid to the client, is for the benefit of the firm. If the bank in which the firm holds funds should fail, the firm reserves the right to disclose to the FSCS the names and other details for clients whose money is held on the general client account in order for the client to claim compensation, the limit of which is currently £85,000.

This policy is reviewed from time to time by the COFA and directors of the firm