Is interest payable on monies being held in client account for costs and disbs

[Jane Warren]

On our PI matters we receive monies in settlement of damages plus an amount on account of costs and disbursements at the same time. We are calculating the amount of interest due on the whole amount received and then forwarding that sum plus our client’s damages amount to them. The on account amount is then held in client account whilst agreement is reached on our costs and disbursements. My question is that interest will be accruing on that amount but this is for our costs and disbursements so is the interest accrued due to our client if they have already been paid their damages plus interest accrued?

[Graham Richardson]

We’ve had this at our firm, as the money is in client account we’ve always taken the view that it is client money as it’s being held prior to a bill being delivered, therefore any accrued interest is due to the client even though it is for the firm’s costs and disbursements, but be interested to know if anyone does treat it differently.

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