This policy sets how we deal with interest on money held for a client by Horne Engall and Freeman LLP (the firm). In accordance with the Solicitors Accounts Rules, 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.

The firm’s interest policy seeks to provide a fair outcome for clients whilst recognising that money must be immediately available and that there are administrative expenses incurred in receiving and holding client funds and operating a client bank account.

When the firm receives monies on behalf of a client it will be paid into a general client account. The general client account will hold a pool of clients’ funds and will be held as an instant access account to facilitate transactions as required by the Solicitors Accounts Rules.

As the holding of client funds is incidental to the carrying out of legal instructions the rate is unlikely to be as much as the interest which could be earned if held and invested in a bank account by a client themselves. In most cases the firm must ensure that money held on client account is immediately available thus ensuring instant access to funds as and when necessary. All this is taken into consideration when calculating the interest.

Factors Considered when determining what is fair and reasonable

As a starting point it is important to consider the fact that the holding of funds will be incidental and necessary to the carrying out of the legal instructions. The operation of a client account has cost implications for the firm and is incidental to the carrying out of legal work on behalf of our clients.

Factors to be considered will include:

  • the level of sums held
  • how long they have been held for and the reason for being held that period of time
  • the type of matter e.g. conveyancing or probate
  • any additional costs in terms of administrative expenses and any time that has been incurred in administering the account.

*In determining the period over which interest is to be calculated the firm will only consider the period between the date of cleared funds received and the date funds are sent externally.

The firm will not account to clients for any interest in the following circumstances:

  • where the interest amount calculated for the period would be less than £100 on the basis that this is a de minimis amount (the administrative costs of dealing with funds would exceed the interest due)
  • on money held for the payment of professional disbursements, in particular where delays in payment of fees to third parties are due to their delays
  • if there is an agreement to contract out of the terms of this policy
  • on funds held for less than 14 days on a conveyancing matter


Calculation of Interest

Interest will be calculated and paid by reference to applicable rates paid to us by our clearing bank based over the period for which the firm holds cleared funds.

Each matter will be considered on a case-by-case basis taking into account all the circumstances and ultimately it will be the decision of the partners of this firm to decide what amount of interest is fair and reasonable in all the circumstances in accordance with SRA Rules.

If funds are to be held for an extended period of time and instant access is not required, they may be placed on a designated deposit account. However, this must be agreed separately with the client and all costs and fees of setting up and administering this account will be charged to the client’s account and deducted from any interest payable.

Unless otherwise agreed, where the firm is conducting more than one matter for a client, balances will not be aggregated for calculation purposes.

In general, the firm will retain interest paid to it by the bank on the aggregate of all client money held in the general account except where it is accountable to a particular client.

This Policy and the rate of interest payable will be reviewed on at least an annual basis in order to ensure that it continues to give a fair outcome to clients and the firm. In general, interest rates will be determined by the interest receivable by the firm on its accounts with its clearing bank. Both the interest rate and the clearing bank may change from time to time.


1 June 2024