MONEY GROUSE : Interest problems on the solicitor's account

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The Independent Online
How much does your money earn when it is held in an account managed by a solicitor? Not very much, as Jonathan Hill has discovered.

Mr Hill, a sales director, has found that more than £10,300 of his money, lodged in the account until a legal dispute with his builder is settled, is earning him a mere 0.5 per cent annual interest.

He calculates that his money, which has been in the same account for three years, could have made at least £1,500. Instead, it has grown by just £200.

As the dispute is not yet settled, Mr Hill faces the prospect of many more months of low returns on his funds, assuming he wins the case.

Not surprisingly, he is unhappy with his lot. "It seems to me that something is wrong here," he said. "As the solicitor is receiving half a per cent on the money he is holding, somebody is benefiting to the tune of some £10 a week at my expense. I canno t see why money lodged with a solicitor cannot receive a reasonable rate.

"What concerns me is not so much my own problem but any case, such as home purchases, where a person may have to leave money in a solicitor's client account for an extended period".

Mr Hill's problems began when he became involved in a dispute over work done on his house in Grantham, Lincolnshire.

The builder involved his solicitor and things became very heated, so in an act of good faith - and very foolishly as it turned out - he paid the disputed £10,300 to a solicitor known to both parties.

The money was to be held in a stakeholder's account, separate from the law firm's own funds, and the `stake' plus any interest would be paid to the winner of the dispute. However, the builder then went bust.

A liquidator was appointed and promised Mr Hill that his money would be released. But the liquidator was struck off the list of certified accountants for misconduct, complicating matters further.

Although a new liquidator has now been appointed, it may be months before the case is resolved.

David Bramall, the head of professional ethics at the Law Society, said that the solicitors' guide to professional conduct says that a solicitor must pay a reasonable rate of interest on client and stakeholder accounts. "It is possible to make a complaint to the Solicitors' Complaints Bureau if the amount paid is substantially less than what would be earned from a building society," Mr Bramall said.

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