Client Interest Policy
In accordance with Rule 7 of the SRA Accounts Rules 2019
1. Introduction and Purpose 1.1 This Client Interest Policy (the “Policy”) explains how Joanna Connolly Solicitors (the “Firm”) handles interest on client money held on behalf of clients or third parties.
1.2 Under Rule 7 of the SRA Accounts Rules 2019, the Firm must account to clients or third parties for a fair sum of interest on client money held, or reach a different written arrangement where clients receive sufficient information to give informed consent.
1.3 This Policy provides a transparent and fair outcome for clients while recognising the practical realities of holding funds (primarily on an instant-access basis in a pooled account to ensure immediate availability). It is brought to clients’ attention in the Client Care Letter and Terms of Business (paragraph 11). A copy is available on request or on the Firm’s website.
1.4 All client money is held in accordance with the SRA Accounts Rules. The Firm places funds with its approved bankers.
2. Types of Client Account 2.1 General Client Account Client money is normally held in the Firm’s pooled General Client Account on an instant-access basis. This ensures funds are immediately available for the client’s matter.
2.2 Designated Client Account The Firm may open a separate Designated Client Account, in the name of the Firm but designated to the specific client or matter, only in the following circumstances:
(a) where a client acting reasonably requests it in writing, and the Firm agrees that it is practicable and appropriate in all the circumstances; or
(b) where the Firm considers it to be in the client’s best interests because:
(i) a substantial sum, normally £150,000 or more, is to be held for a significant period, normally more than 8–16 weeks; or (ii) the nature of the transaction or the terms of the retainer specifically require a separate designated account (for example, certain rent deposits, court-directed funds, or probate/estate matters involving prolonged holding periods); or (iii) there are other exceptional circumstances where the amount and expected duration of the funds make it fair and reasonable to do so.
The Firm is not obliged to open a Designated Client Account in any circumstances and will have regard to:
(i) the amount and expected duration of the funds;
(ii) the client’s best interests and any reasonable request made;
(iii) administrative practicality and any additional bank charges or administrative costs
(which will normally be passed on to the client); and
(iv) the need to keep funds immediately available unless otherwise agreed in writing.
A fee may be charged for the additional administration involved in opening and operating a
Designated Client Account.
3. Payment of Interest – Firm Policy
3.1 General Client Account
The Firm does not pay interest on monies held in the General Client Account.
This is a different arrangement under Rule 7.2. Clients are given sufficient information at the
outset (via the Client Care Letter, Terms of Business, and this Policy) to give informed
consent.
3.2 Designated Client Account
Where funds are held in a Designated Client Account, the Firm will account to the client for
all interest actually earned on that account (net of any bank charges or tax deducted at source
attributable to the account).
Interest will normally be calculated at the conclusion of the matter (or periodically in longerrunning
matters) and paid gross. The recipient is responsible for declaring any interest to
HMRC.
4. De Minimis Threshold and Calculation
No interest will be paid on a Designated Client Account where the total interest accrued is
£100 or less. This de minimis reflects the administrative costs of calculation and payment and
is considered fair and reasonable.
Interest, where payable, is calculated on cleared balances using the rate actually earned or a
fair reference rate linked to the Firm’s client account(s).
5. Circumstances in which no interest is payable
In addition to the above, no interest will be paid in the following circumstances:
(i) on money held for the payment of a professional disbursement where the payee has
requested delayed settlement;
(ii) on money held for the Legal Aid Agency;
(iii) on advances made by the Firm under the SRA Accounts Rules;
(iv) where the client has agreed in writing to a different arrangement;
(v) on uncleared funds; or
(vi) in any other situation where payment would not be fair and reasonable.
6. Banking Failure and Liability
Whilst the Firm places client funds with its bankers in accordance with the SRA Accounts
Rules, the Firm will not be liable to refund any monies lost through a banking failure that are
not covered by any statutory deposit protection scheme (e.g. the Financial Services
Compensation Scheme).
7. Application of Client Money and Set-Off
7.1 The Firm is entitled to pay its invoices from any sums received or held on the client’s
behalf.
7.2 Where the client is selling land or other property, the Firm will generally settle its invoices
from the sale proceeds.
7.3 All monies held for the client, including any interest earned, will be applied to settle the
Firm’s invoices where appropriate.
8. Alternative Arrangements
The Firm may agree a different interest arrangement with a client or third party in writing,
provided sufficient information is given to enable informed consent. Any such agreement will
be recorded.
9. Review
This Policy, including the de minimis threshold and any reference rates, will be reviewed at
least annually by the Firm’s Compliance Officer for Finance and Administration (COFA), or
sooner if there are significant changes in interest rates, banking arrangements, or the SRA
Accounts Rules. Updated versions will be published on the Firm’s website.
10. Queries
Any questions regarding this Policy should be directed to the fee-earner handling your matter
or to the Firm’s COFA.
Effective date: 06/04/2026
Version: 3
Approved by: