MoJ’s client account interest plan risks placing untenable burden on smaller firms, CILEX warns

9 March 2026

Government plans to use interest on lawyers’ client accounts to fund the beleaguered justice system fail to stipulate how much money might be raised or how it would be spent, whilst overlooking the possible cost and administrative burden small and medium sized firms would face, says CILEX (Chartered Institute of Legal Executives).

The legal sector already makes a significant contribution to the running of justice via the funding of its own regulatory system – and billions in tax – and this proposal “represents a further tax and compliance burden which could adversely affect the sector’s contribution to UK plc”.

Responding to the Ministry of Justice (MoJ) consultation on an Interest on Lawyers’ Client Accounts scheme, CILEX says: “In common with other such costs, there is similarly a risk that they will be passed on to consumers, particularly by the smaller firms least capable of bearing the additional costs themselves, raising another unwelcome barrier at a time when there is a multiplicity of such challenges to access to justice for many.”

The proposals, CILEX argues, do not demonstrate any consideration of the operation of similar schemes in other jurisdictions, nor do they reference ongoing research by the Centre of Socio Legal Studies at Oxford University which suggests it is not usual for central governments themselves to run such schemes.

Whilst such a scheme may have potential, with no detailed impact assessment, the risk to vulnerable parts of the sector is unknown. Firms working in legal aid, for example, could potentially lose a valuable cross-subsidy, exacerbating the growing problem of legal advice deserts.

The amount of money likely to be raised is unclear, with a danger that extra funding “would simply be absorbed into the MoJ’s own bottom line without any measurable positive impact on the justice system”. Further, there is a lack of explanation of how a potentially complex operation, with fluctuating income levels, would be run by the MoJ without the specialist knowledge to do so.

CILEX President Sara Fowler says: “Our underfunded justice system is in desperate need and the use of client money interest to fund it is an idea that has potential, provided the impact and practical administration of the scheme is properly thought through.

“As is stands we are being consulted on proposals that lack an underpinning evidence base, fail to assess the impact of the additional cost and administrative burden on law firms or the potential consequences for consumers or access to justice.

“We urge the government to step back and thoroughly assess how such a scheme would operate as well as providing greater clarity on the level of funds likely to be raised and the extent to which they would have measurable, positive benefits for justice.”

ENDS

For further information, please contact:

Aicha Marhfour, Black Letter Communications on 0203 567 1208 or email at [email protected]

Louise Eckersley, Black Letter Communications on 0203 567 1208 or email at [email protected]

Notes to editors:

CILEX (The Chartered Institute of Legal Executives) is one of the three main professional bodies covering the legal profession in England and Wales. The approximately 18,000-strong membership is made up of CILEX Lawyers, Chartered Legal Executives, paralegals and other legal professionals.

CILEX pioneered the non-university route into law and recently launched the CILEX Professional Qualification (CPQ), a new approach to on-the-job training that marries legal knowledge with the practical skills, behaviours and commercial awareness needed by lawyers in the 2020s.

The CPQ is a progressive qualification framework that creates a workforce of specialist legal professionals, providing a career ladder from Paralegal through to Advanced Paralegal and ultimately full qualification as a CILEX Lawyer. CILEX Lawyers can become partners in law firms, coroners, judges or advocates in open court.

CILEX members come from more diverse backgrounds than other parts of the legal profession:

76% of its lawyers are women
16% are from ethnic minority backgrounds
- 8% are Asian or Asian British
- 5% are Black or Black British
- 3% are from a mixed ethnic background
77% attended state schools
63% come from families where neither parent attended university
Only 3% of its members have a parent who is a lawyer.

CILEX members are regulated through an independent body, CILEx Regulation. It is the only regulator covering paralegals.