Q Can I charge an administration fee to clients when working out how much interest I need to pay them for money held in my general client account?

A Rule 24 of the Solicitors Accounts Rules 1998 sets out the circumstances in which a solicitor must pay a sum in lieu of interest in respect of money held in the general client account.

The obligation to pay a sum in lieu is calculated in accordance with rule 25(2), which allows the solicitor to retain some of the interest earned.

There is no obligation to pay the total received as there is on a separate designated client account.

Rule 24, note (vi) states that 'it is not improper to charge a reasonable fee for the handling of client money when the service provided is out of the ordinary.' A solicitor is not entitled to charge an administration fee for the time spent calculating the interest.

This is required by the rules and is part of your overheads.

Endowment mortgages

Solicitors are reminded that if a law firm arranged an endowment mortgage on a discrete investment business (DIB) basis, then the firm will be responsible for the advice to take out the endowment mortgage (see [2003] Gazette, 17 April, 29).

A guidance sheet is available from professional ethics (tel: 0870 606 2577, DX 19114 Redditch).

It includes a list of consultants/actuaries who can carry out a loss calculation for you.

Practising certificates

The Law Society's professional ethics department has produced a free booklet entitled Do I need a practising certificate? Solicitors can obtain a copy by telephoning the number below.

The information is also available at: www.guide.lawsociety.org.uk (click on Browse the Guide, then on chapter 32).

Telephone hotline

The professional ethics lines are open for general enquiries between 11am and 1pm, and 2pm and 4pm.

The lines are less busy in the afternoon.

It takes emergency calls outside these hours, tel: 0870 606 2577.

Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD