Interest policy

The professional rules governing the payment of interest on client funds can be found in Rule 7 of the Solicitors Accounts Rules 2019. Please see the SRA website for details. 

In accordance with the rules, we will account to clients for interest on those funds when it is fair and reasonable for us to do so in all the circumstances.

When monies are received on behalf of a client, it will be paid into general client account in which amounts for different clients are pooled. These are held on an instant access account to facilitate the transaction(s) they are held for.

Payment in lieu of interest

  1. We acknowledge an obligation to account to our clients for a fair sum in lieu of interest on any money we hold on their behalf. This policy confirms the circumstances in which we will comply with this obligation by making a (gross) payment in lieu of interest (which will need to be declared on any tax return made).

  2. Unless specifically instructed otherwise in writing (and we agree), we will hold client monies in an instant access account. Accordingly, sums payable to clients in lieu of interest are likely to be less than those which they might otherwise obtain from a bank or savings institution where funds can be deposited for fixed periods of time. Our rate offered will also take into account any auxiliary administrative costs for dealing with any funds held by us.

  3. Subject to paragraph 8, we will pay to each client a sum in lieu of interest (in relation to the period in which we hold money on their behalf) calculated at an applicable rate from time to time.

  4. We will review periodically, and at least when our principal deposit bank’s (currently National Westminster Bank Plc) base rate or the rate(s) available to Higgs LLP on funds held on deposit changes.

  5. Interest will be calculated on the principal sum held and paid by reference to the applicable rates over the period for which we hold cleared funds. We will set new applicable rates of interest to apply from the date by reference to the lower of either:
    • 0.5% below;
    • Our principal deposit bank’s base rate or;
    • The rate(s) available to Higgs LLP on funds held on deposit
    • The rate money would have earned had it been placed in a suitable instant access deposit account at one or any of our client deposit banks
  6. We will calculate and make any payment in lieu of interest within a reasonable time of completion of the client’s matter or at other appropriate intervals.

  7. Unless otherwise agreed, where we are conducting more than one matter for you, balances will not be aggregated for calculation purposes.

  8. No payment in lieu of interest will be paid in the following circumstances:

    • If the amount of interest is £100 or less (we consider that the auxiliary administrative costs of dealing with the funds would exceed the interest due) unless in the Firm’s sole discretion it chooses to do so;
    • If our principal deposit account bank’s base rate is below 0.5%;
    • If the rate offered to Higgs by our principal deposit bank is less than 0.5%;
    • If we hold funds for the payment of a professional disbursement;
    • If there is an agreement to contract out of the terms of this policy specifically agreed in writing (and we agree)
    • If we advance funds into our general client account to fund a payment on your behalf in excess of funds already held for you in that account; or
    • We hold cleared funds not exceeding the amount shown below for a time period not exceeding the period shown below:
      • £1,000 for eight weeks
      • £2,000 for four weeks
      • £10,000 for two weeks
      • £20,000 for one week

Charge for negative interest rate

In the event that:

  • Our principal deposit bank’s base rate falls below 0%
  • The rate(s) available to Higgs LLP on funds held on deposit are less than 0% and/or
  • Our principal deposit bank levies upon us an interest charge in respect of any money we are holding on behalf of a client, we will be entitled to seek reimbursement in lieu of all such interest charges/costs from our client.