The Ministry of Justice (MoJ) will put high street law firms at
risk and force legal fees to rise for those that survive if it
goes ahead with proposals in its consultation published today (7
January), which would divert funds from Interest on Lawyers'
Client Accounts (ILCA) to the MoJ budget.
Law Society of England and Wales president, Mark Evans, said:
“The MoJ has decided to take money from the interest earned on
law firms' client accounts to boost its own budget. Yet, as its
own consultation reveals, it has no clear idea how this proposal
will work in practice and no understanding of the serious
consequences this will have on high street firms and access to
justice throughout England and Wales.
“Firms will close, fees will rise and clients will be impacted if
the MoJ goes ahead with the proposal.
“The cost of doing business in the legal sector is already high,
with recent rises to National Insurance contributions meaning
businesses are paying more. The proposal comes at a time when
small firms will have to manage new regulatory burdens on
anti-money laundering supervision and tax adviser registration.
High street law firms will face a perfect storm of new
bureaucracy, undermining the UK government's efforts to achieve
growth and revitalise local economies.
“Despite the short timeframe for the consultation and the MoJ's
efforts to keep the proposal under the radar, the Law Society
will be consulting widely with its members across the country.”
Notes to editors
