The New Year has started with a flurry of consultations for law firms and solicitors, which Cardiff & District Law Society urge our members and the wider legal profession to consider contributing to – or to join our response.
Our Regulatory Officer, Jonathan Marsh, has compiled a list of the four open consultations inviting formal responses – one from the MoJ, one from the SRA and two from the LSB.
They are listed them below together with helpful links for those interested in sharing their feedback for our formal response on behalf of CDLS for each of the consultations.
We welcome any comments to be sent in advance of the deadline dates (listed), to admin@cardifflaw.org
1. MOJ Interest on Client Accounts Consultation
The MoJ has launched a consultation on an “Interest on Lawyers’ Client Accounts Scheme” (ILCA). Under this scheme, a proportion of the interest earned on client funds held by law firms in England and Wales would be remitted to government rather than retained by the firm or, where applicable, returned to clients.
Interest Remittance Rates Being Proposed
- Pooled client accounts (where many clients’ funds are held together): 75 % of interest would be paid into a central government fund.
- Individual client accounts (set up for specific clients/specific matters): 50 % of interest would be remitted.
- This also potentially applies to third-party managed accounts where client funds are held under arrangements run by a bank or service provider on behalf of a firm.
According to the consultation document:
- The justice system is facing ongoing financial pressures, including court delays and under investment.
- The Government argues that client account interest is “unearned income” that could better support justice services rather than being retained by firms.
- The scheme would provide a new revenue stream to help sustain and strengthen the justice system without increasing taxes.
- The Government states that similar models operate in countries such as the USA, Canada, Australia, and France to fund legal aid and access-to-justice services. However, unlike some international models where interest income is earmarked for legal aid or access to justice, the MoJ’s current draft would add the money to central budgets to support justice system priorities broadly — a point of contention in itself!
As you may well be aware, there have already been significant concerns raised by legal bodies and commentators and we of course would particularly welcome any of your comments to feed into the consultation.
The consultation is open until 9 February 2026.
If you would like to join the CDLS response, please send your input to Jonathan Marsh, via admin@cardifflaw.org no later than the 2 February 2026.
Law Society Webinar on the Client Accounts Consultation
There is a Law Society members talk and consultation being held on Thursday 22 January (12pm – 1pm) on which you can register free to join here.
Useful links for this consultation
- Interest on Lawyers’ Client Accounts Scheme consultation – Ministry of Justice – Citizen Space
- https://www.lawgazette.co.uk/news/hand-over-client-account-interest-firms-to-be-told/5125519.article
- Interest on lawyers’ client accounts (ILCA) | The Law Society
- Interest on Lawyers’ Client Accounts Scheme: Law Society Member Consultation (Thursday 22 January 2026) – Law Society LMS
2. SRA Further Consultation on Client Money in Legal Services
This consultation follows on from the November 2024 consultation ‘Client money in legal services – safeguarding consumers and providing redress’ (to which CDLS previously responded). The further consultation seeks views on two key areas:
- Improvements to the accountants’ reports regime.
- Strengthening the checks and balances provided by compliance officers.
The link for the consultation is: SRA | Further consultation on client money in legal services: Protecting the client money that solicitors hold | Solicitors Regulation Authority
The consultation is open until Friday, 20 February 2026.
If you would like to join the CDLS response, please send your input to Jonathan Marsh, via admin@cardifflaw.org no later than the 10 February 2026.
3. Legal Services Board – 2 Consultations
i. Consultation on Business Plan and Budget
This consultation is open until 11 February 2026.
ii.Consultation on Encouraging a More Diverse Legal Profession
The LSB are consulting on a draft statement of policy on ‘Encouraging a diverse legal profession.’ The draft statement contains a series of outcomes and expectations for legal services regulators to pursue in support of equality and diversity across the profession. This is clearly an important consultation so any comments would be warmly welcomed in readiness for me responding to the consultation.
This consultation is open until 2 March 2026.
The link for further information and how to respond is: Open consultations – The Legal Services Board