Interest on lawyers’ trust accounts (IOLTA)

Our view

Our long-standing position is to oppose IOLTAs because they:

• are unlikely to generate enough money to justify the damage that they will cause to small firms
• will not provide a certain income for access to justice initiatives
• can be avoided by moving money offshore or taking business outside the UK
• may reduce the level of pro bono work done by large firms
• will reduce the level of interest, service and competitiveness of the sector
• will add to the cost of business for small and medium enterprises (SMEs), negatively affecting overhead costs, which is significant for small firms already operating at the margins

In February 2025, we raised our concerns in response to the SRA consultation on client monies in legal services.

What this means for solicitors

Having completed an initial survey of firms, the MoJ is holding roundtable discussions in August 2025.

Firms invited to an MoJ roundtable may also wish to consider the following points when deciding whether to attend and what to say.

1. Provide hard evidence such as actual costs and figures from your accounts, as this is being collected for ministerial consideration.
   
   This could apply to comments on issues such as:
• the amounts of interest you receive
• the effect such a proposal will have on your firm
• the levels of administration involved
  
  
2. If you believe the proposals will increase your firm’s administrative burden, consider whether – and to what extent – the additional costs might affect your ability to continue offering legal aid services or undertaking pro bono work.
   
   For example, would you reduce your legal aid and pro bono work and increase your private work to offset the costs of more administration?

Next steps

We are looking at the evidence around IOLTA schemes and the potential impacts of introducing one in England and Wales.

As the professional body for solicitors, we are preparing to respond if and when the MoJ consults on substantive proposals.