The conveyancing Association warns that MoJ proposals could raise costs and reduce market capacity
The Conveyancing Association has set out clear opposition to proposals from the Ministry of Justice to introduce a new Interest on Lawyers’ Client Accounts scheme, warning of higher costs for consumers and risks to the sustainability of conveyancing firms.
In a response published on 5 February 2026, the Conveyancing Association (CA) addressed the Ministry of Justice’s consultation on the proposed Interest on Lawyers’ Client Accounts (ILCA) scheme. The proposal would require law firms to transfer a significant proportion of interest earned on client money into a central fund intended to support the justice system, including legal aid and court services.
Under the consultation proposals, banks would continue to pay interest on client accounts, but firms would be required to pass on most of that interest to the scheme. For pooled client accounts, between 75% and 100% of interest could be taken, while around 50% of interest from individual client accounts would be transferred. The proposals would apply to most client accounts, including those used for residential conveyancing transactions, with interest collected monthly or quarterly and administered centrally.
The CA said it does not support the proposals and has opposed them in strong terms. In its response, the Association said interest earned on client accounts should not be viewed as spare income or a windfall for firms. It said that for many conveyancing practices, this income helps meet the genuine and rising costs associated with maintaining compliant client accounts, including banking fees, audits, anti-money laundering controls, systems and fraud prevention measures designed to protect consumers.
The Association warned that removing this income would not be cost-neutral. It said firms operating on already tight margins would be unable to absorb the loss and would instead be forced to pass costs on to clients through higher fees. The CA said first-time buyers and those transacting at lower price points would be most affected.
The response also highlighted potential risks to existing conveyancing business models, including fixed-fee, high-volume and high-street firms. The CA said some firms rely on retaining client account interest, with client consent, to remain commercially viable.
The Association further warned that the proposals, combined with existing regulatory pressures such as financial crime controls and requirements linked to stamp duty land tax submissions, could lead to firms leaving the market. This, it said, would reduce capacity at a time when the number of active conveyancing firms is already falling while transaction volumes remain high.
Concerns were also raised about access to banking, with the CA noting that many firms already face difficulties opening and maintaining client accounts due to bank de-risking and AML requirements. Additional complexity, it said, could worsen the situation.
Beth Rudolf said client account interest plays a practical role in funding systems and safeguards that protect consumers. She warned that removing it would lead to higher fees and additional pressure on firms, and criticised the consultation process as rushed, urging the Ministry of Justice to reconsider the proposals and engage more closely with the conveyancing sector.