New research outlines how client account interest schemes operate abroad as UK review continues
The Ministry of Justice is examining whether interest generated on lawyers’ client trust accounts could play a role in supporting long-term access to justice, according to new independent research commissioned by the department.
The research, conducted by Pye Tait Consulting, was designed in part to inform the Ministry of Justice’s understanding of Schemes that Secure the Interest on Lawyers’ Client Trust Accounts, known as SILCAs. These schemes operate in several other jurisdictions and channel interest earned on pooled client funds into legal aid, pro bono work and other justice-related services.
The report sets the UK discussion within an established international context. It outlines how SILCA-style models have been in operation since the late 1960s in countries including Australia and Canada, and more widely in the United States through Interest on Lawyers’ Trust Accounts, commonly referred to as IOLTAs. Under these arrangements, interest that would otherwise be uneconomic to distribute to individual clients is aggregated and redirected to support public interest legal services.
The research notes that the way these schemes operate varies between jurisdictions. In some countries, the proceeds are administered by independent non-profit bodies. In others, the funds are distributed through a combination of grants, legal education programmes and, in some cases, contributions towards regulatory costs.
The report also highlights alternative approaches. France’s CARPA system is cited as an example of a model that centralises client funds primarily to enhance security and support anti-money laundering objectives. While interest generated under this system can, in limited circumstances, support legal assistance, this is not its primary purpose.
Turning to the UK context, the research makes clear that the Ministry of Justice does not currently hold a settled view on whether a SILCA or IOLTA-type scheme should be introduced in England and Wales. Instead, the study was commissioned to establish baseline evidence on how interest from general client accounts is presently used, how reliant firms are on that interest, and what implications any future change might carry.
In its conclusions, the report states that there may be merit in exploring further how interest from general client accounts could be used to support individuals who face barriers to accessing legal services. However, it also emphasises that any such exploration would need to consider a range of factors, including rising interest rates, inflation, existing firm behaviour and the risk of unintended consequences.
The research stops short of recommending the adoption of a SILCA scheme. Instead, it identifies consultation, comparative analysis and careful consideration as necessary steps should policymakers decide to take the issue further. By situating the UK debate alongside long-established international models, the report provides a factual foundation for future policy discussion without signalling that reform is imminent.