Interest to client.

[Elvina Fooy]

At present we have a di minimus of £50.00 per matter, however one of our partners wants to change this to £50.00 per beneficiary / recipient.

Apparently another local firm has this in their Ts and Cs.

I don’t agree with this, as I cant see how its fair and reasonable, (Plus will create more work for me) has anyone else come across this before ? or had it implemented in their firm ?

Cheers

[Phil Invernizzi]

No I haven’t! But I like the sound of it… I will watch the following comments closely.

[James]

I think your concern over fair and reasonable is valid and I would expect your auditors and SRA to question it as not being a justifiable amount. If you had a probate matter with 10 beneficiaries you’d be charging £500 for an interest calculation that any good accounts system does at the click of a button, I’d view this as unfair retention of client funds and would expect issues to arise around artificial inflation of charges as irrespective of the number of beneficiaries you’re only doing one interest calculation

A couple with a sale file with £120 interest under the proposed two beneficiary charges would only receive £20 of the interest due to them likely leading to a complaint that will cost £400 when they go to he Legal Ombudsman who focus heavily on fairness. Worse would be if you charged multiple beneficiaries on one matter type i.e. probate and not conveyancing you would systematically be disadvantaging clients and destroying the justification for doing it in the first place

[Darrell Kovac]

Hi Elvina,

We do indeed have this in place. We keep our client balances very low for an international firm (less than 50) that are closely monitored by one of our cashiers. Our interest calculations works per sum of money received and we also have a £50 di minimus. If the sum of money received does not hit £50 in interest, then we do not pay it. Happy to discuss further if you need further info.

[Author]

Posts