The Bar Council has closed its third-party escrow service Barco, saying that income from fees and charges had not matched the costs of running the service.
A spokesperson said that since Barco was set up five years ago it had been largely subsidised by funds from training and events and business partnerships. A statement said that, following a commercial review of all of the council’s services and products, it had decided to close Barco.
Barco was set up as a way of enabling barristers to handle client money when they moved into activities that were traditionally the preserve of law firms. The scheme was also attractive to solicitors as its client account regulations were less stringent than for firms regulated by the Solicitors Regulation Authority. In 2015, the SRA offered a waiver to The Legal Director, a firm it regulated, allowing it to use Barco. Some other SRA firms, including Evolve Family Law, switched from the SRA to be regulated by the Bar Standards Board (BSB) and opted to use Barco.
The council said that a number of commercial providers in the market, such as Shieldpay and Transpact, have been identified as suitable escrow providers for the self-employed bar.
The Gazette understands barristers who use Barco have been informed directly.
Barco was modelled on the French system CARPA, a regulated payment services provider that caters for the whole legal profession.
The Bar Council’s ethics committee said it will now revise its ethical guidance on handling client money in light of the closure.