Interest payable on solicitor accounts

We have received notification of a decision in a case at Edinburgh Sheriff Court involving SLAB in which a solicitor is seeking payment of interest on amounts found due by the auditor of court.

Procedurally the case is not yet concluded, with a number of matters requiring further attention and determination. Detailed comments are not therefore appropriate at this time, but we recognise that the case has potential to be of wider interest and has already attracted some attention.

The decision of the sheriff was intimated to us on Monday following a debate hearing in the case in early December. We are currently carefully considering the terms of the decision, including options for appeal.

This area of law is not straightforward. The essence of the decision is that the sheriff agreed with the pursuer that the payment of legal aid fees to solicitors was subject to the provisions of the Late Payment of Commercial Debts Act 1998, although this was not previously thought to be the case.

At this stage, any assessment of the consequences of this decision is likely to be speculative. At a very basic level the decision would mean that in some circumstances interest may be due, along with a fixed-sum compensatory payment, on amounts not paid in accordance with the framework set out in the 1998 Act.

Until a final determination is made by the Court and thereafter subject to any appeal, current arrangements will continue to apply.

We will provide further information in line with developments in the case as appropriate and necessary to give effect to any changes in the legal framework emerging from the case while ensuring the continued effective operation of the legal aid payment system.

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