Law Society opposes UK Ministry of Justice funding scheme and SRA reforms

The Law Society has criticized the UK Ministry of Justice for what it describes as “moving forward with stealth” regarding the proposed Interest on Lawyers’ Client Accounts (ILCA) scheme. The Ministry recently advertised a role to support the design and implementation of the scheme, which aims to redirect a portion of interest earned on legal client accounts in England and Wales to fund critical justice services and legal aid.

The Law Society maintains that the proposal is “fundamentally flawed” and acts as a “crude sector-specific tax on clients of legal services.”

Separately, the Law Society has responded to a Solicitors Regulation Authority (SRA) consultation on reforming first-tier complaints handling. The Society warned that the SRA’s prescriptive proposals—such as requiring fixed resolution timelines—could create “perverse incentives” for firms to settle weak complaints for commercial reasons rather than on merit to avoid administrative burdens.

The Society also called for urgent guidance on managing the rise of AI-generated complaints, suggesting that firms should focus on substantive issues rather than responding line-by-line to lengthy, automated submissions.