COUCHMAN HANSON INTEREST POLICY
Client money held on behalf of clients and trusts
1. Policy statement
A sum of interest must be accounted to the client where it is fair and reasonable to do so, in accordance with the SRA Accounts Rules and our interest policy. Our interest policy seeks to provide a fair outcome for both us and the client. Our interest policy is set out in the terms of business issued to clients at the start of a matter, unless standing terms apply. This policy applies to money held on behalf of clients in both general and separate designated client accounts.
2. When interest will not apply
Interest will not apply to:
money held for the payment of professional disbursements if the payee has requested a delay in settlement; and
money held where there is an express written agreement with the client to contract out of our interest policy, provided sufficient information has been given to enable the client to give informed consent.
3. Review of interest rates and fairness
Interest rates payable on client accounts may change over time and sums involved may therefore become material. We will keep this policy under review to ensure that the outcome remains fair and reasonable in the circumstances. The policy and/or rate applied may change following an increase or decrease in the Bank of England base rate or other material change in the rates available on relevant client accounts.
4. General client account
For clients whose cleared funds are paid into a general client account, we will account for a sum in lieu of interest unless one of the following applies:
1. the amount of interest calculated on the balance held is less than £100; or
2. the funds are held for 5 business days or less.
In all other cases, the client will be paid interest at the rate payable upon our client account, unless there are specific circumstances in which the client has expressly agreed to contract out of the right to receive interest in accordance with this policy.
5. Separate designated accounts and trusts
All interest arising from funds held in a separate designated client account will be credited to the client. All interest arising from funds held on behalf of a trust will be credited to the trust.
6. Timing of payment
We will usually account to the client for interest at the conclusion of the client’s matter unless it is considered more appropriate to account to the client at intervals throughout the matter.
Where we continue to hold a balance for more than 12 months, we will provide the client with an annual update showing the interest accrued. The interest will not ordinarily be paid annually and will remain payable at the conclusion of the matter, unless it is considered more appropriate to account to the client earlier in accordance with this policy.
7. De Minimis and Administrative Thresholds
To ensure a fair and proportionate outcome, the firm applies a de minimis threshold for payments of interest arising from funds held in the general client account. If the amount of interest calculated for a client on a matter is less than £100, no interest will be paid as it would be disproportionate to calculate and pay such amounts having regard to the administrative cost and current rates.
The de minimis threshold will be reviewed at least annually, taking into account prevailing interest rates and operational costs.
This threshold does not apply to separate designated client accounts, where all interest earned is credited to the client.
8. Five business day lead time
A minimum of five business days’ lead time is required for any interest calculation or payment. The lead time begins when the Accounts Department has received all information required to carry out the calculation. Fee earners must therefore submit requests sufficiently in advance of completion, transfer of funds, file closure or any other relevant deadline.
9. Administration and taxation
The Accounts Department will prepare the calculation following a request or instruction from the relevant fee earner and subject to the five business day lead time above. Interest will normally be paid gross. The client is responsible for any tax reporting or liability arising from interest received and should obtain independent tax advice where appropriate. We will not inform HMRC of any interest pay outs and you are responsible for reporting your income.
10. Governance and consistency with client terms
The current SRA Accounts Rules do not prescribe a fixed de minimis amount of interest. The firm has therefore adopted a £100 threshold as its policy position and will keep that threshold under review to ensure that it remains fair and reasonable having regard to prevailing interest rates, administrative cost, the nature of the firm’s client base and the circumstances in which client money is held.
11. Terms of Business Cross-Check
Whenever this Interest Policy is reviewed or amended, the firm must also review the corresponding interest provisions contained within its template Terms of Business, client care documentation and any applicable standing terms.
The cross-check must confirm that the documents are consistent in respect of:
the £100 de minimis interest threshold;
the rule that interest will not normally be payable where funds are held for one week or less;
the interest rate or basis upon which interest is calculated;
the treatment of money held in general and separate designated client accounts;
the treatment of trust money;
circumstances in which interest will not be payable;
arrangements for expressly agreeing with a client to contract out of the policy; and
when interest will normally be calculated and paid.
the annual reporting of accrued interest where a balance is held for more than 12 months.
The five-business-day Accounts lead time is an internal administrative requirement. Where it is referred to in client-facing documentation, the wording must be consistent with this policy.
The Practice Manager and/or COFA should ensure that the cross-check has been completed before any revised Interest Policy or Terms of Business wording is put into use.
Key operational provisions:
De minimis Policy - No payment where calculated interest is less than £100.
Short holding period - No payment where funds are held for one week or less.
Lead time - Minimum 5 business days once Accounts has all required information.
Designated accounts - All interest credited to the client.
Trust money - All interest credited to the trust.
Review trigger - Kept under review, including following Bank of England base-rate changes.
Updated: September 2026