Interest on Lawyers’ Client Accounts Scheme

On 9 March 2026, CIPA submitted its response to the Ministry of Justice’s consultation on the proposed use of interest in lawyers’ client accounts. The response was drafted by Matt Dixon and the Public Affairs Committee.

Summary of CIPA’s submission

• There are rare circumstances in which the work of patent attorneys requires client money to be held in a client account.
• The potential revenue generated by the application of the proposed scheme to patent attorneys is negligible.
• The Ministry of Justice should exclude the patent attorney profession from the proposed
• Alternatively, a threshold level of interest generated from client money in a year should be set at a reasonable level, below which participation in the proposed scheme is not
• In this way, an entirely unnecessary administrative burden on our members (and the scheme itself) can be avoided.

Activities of Patent Attorneys

The overwhelming majority of work undertaken by UK patent attorneys in private practice is the filing and prosecution of patent, trade mark and design applications in the UK, Europe and overseas, together with associated legal advice and contentious matters such as opposition and litigation. Litigation in the courts with associated awards of damages and costs makes up a relatively small proportion of the work of patent attorneys. The bulk of a patent attorney’s work consists of representing clients at the European Patent Office (EPO), the UK Intellectual Property Office (UK IPO), the World Intellectual Property Office (WIPO) and, through a network of overseas attorneys, at other patent offices around the world. This work does not require a patent attorney to hold client money in a client account.

There may be unusual occasions where a patent attorney is required to hold client money in a client account, such as the example situations in the Client Money Guidance issued by IPReg:

‘damages received by you from the defendant after your client has won a breach of [trade mark] claim or money received from your client to enable you to settle a losing claim on their behalf’.

These situations are, however, very rare for most patent attorneys and their firms. The IPReg guidance is provided to address such situations, despite their rarity.

In order to carry out the work, many patent attorneys maintain accounts at the various patent offices where they have to deposit sums in advance of paying fees. This is their own money and they do not receive any interest from the UK IPO, EPO or WIPO on the sums held there. They may seek money on account from clients ahead of undertaking an expensive filing programme where the patent attorney will defray or be liable to defray disbursements on behalf of the client. These sums have nothing to do with the Civil Justice System. Any sums which the firm choses to put into a client account are typically held for short periods of time (less than a month) and are unlikely to generate any relevant amount of interest.

Administrative burden

Given the rarity of the occasions on which patent attorneys will hold money in a client account, the imposition of the scheme proposed in the Consultation would represent an unnecessary administrative burden on the patent attorney profession, which is entirely disproportionate to the potential revenue generated for the government. For example, at current interest rates, a patent attorney would need to hold an average client account balance of £50,000 for a whole year to generate £938 for the government. This level of client account balance is inconceivable for a patent attorney in normal practice.

We understand that IPReg has data for the client account holdings of regulated patent attorney firms. We expect IPReg to be able to support our position.

Regulatory burden

Even with such miniscule potential revenues for the government, it would be disproportionate to expect patent attorney firms to register with the scheme, provide evidence of compliance, correspond with the scheme administrator, etc. All of this will add to the regulatory burden on the profession without any proportionate benefit to the country and will only add to costs.

Patent attorney firms are already subject to detailed client money rules administered by IPReg. Furthermore, government has proposed that anti-money laundering responsibility should transfer to the Financial Conduct Authority and we are seeking clarification with respect to the work of patent attorneys. Introducing an additional reporting or compliance framework under the proposed scheme would duplicate existing regulatory oversight while generating negligible benefit. This appears to be in conflict with the government’s intent to reduce the regulatory burden to promote economic growth.

Under the government’s Better Regulation Framework, maintained by the Department for Business and Trade, there is the expectation that regulation is evidence-based, costs to business are justified, alternatives to regulation are considered, and impacts are assessed before and after implementation. Recent government policy emphasises that regulation should support innovation, growth and competitiveness. The current proposal on interest on client accounts is counter to the Better Regulation Framework.

Our position

There are relatively rare circumstances in which the work of patent attorneys requires client money to be held in a client account. According to IPReg data on client accounts, only 15% of firms and 4.8% of sole traders hold any client money at all. The potential revenue generated by the application of the proposed scheme to patent attorneys is negligible.

We would ask therefore that the Ministry of Justice excludes the patent attorney profession from the proposed scheme or that a threshold level of interest generated from client money in a year is set at a reasonable level and below which participation in the proposed scheme is not required. In this way, an entirely unnecessary administrative burden on our members (and the scheme itself) can be avoided.