BARCO and the alternatives for escrow

June 07, 2014 tags: Blog, Legal Articles, News

What is BARCO, what is an escrow account and what are the alternatives? These are the questions we seek to answer in this article. With freedom comes responsibility.  The potent combination of direct public access alongside the litigation licence introduced in January 2014 has empowered the barristers' profession like never before, opening up new opportunities to provide a full service to clients free from dependence on solicitor referral.  By the same token it has exposed counsel to a range of new obligations, not least of which surrounds client money. Rule C73 of the BSB Handbook makes it clear that “you must not receive, control or handle client money apart from what the client pays you for your services".  However, by taking instructions directly from the public and taking over the litigation function formerly the province of solicitors, barristers confront the need to secure client funds for the purposes of ongoing legal fees, settlements, disbursements and costs.  Enter Barco. BARCO and the alternatives for escrowIn 2012 the Bar Council introduced BARCO, its own FCA-authorised escrow facility specifically to enable its members to offer its services to the public without falling foul of the conduct rules.  Operating as a third party company, clients pay funds into their own ring-fenced BARCO Client Monies Account.  Segregated and protected by insurance, the account lasts for the duration of the working relationship.  The barrister is able to receive payments from that account, but only in accordance with an agreement established between the parties at inception. BARCO is attractive for clients not only because of the protection afforded to their funds, but because any interest earned during the holding period is returned directly to them.  Furthermore, international clients are able to pay into BARCO using their own currency.  From the perspective of the Bar, the advantages of BARCO go beyond simply being able to compete in the new legal landscape.  The facility comes with its own Framework Agreement built in, setting out the conditions under which funds can be transferred out and designed specifically for the barrister-client relationship.  Crucially it is a secure service designed from the outset around the money laundering regulations. Though a popular choice, the escrow market is alive with alternatives.  Transpact, for example, is one such facility that operates across sectors.  Designed with individual transactions in mind, Transpact is flexible when it comes to defining the agreed conditions governing each transfer of funds and may therefore be an appropriate solution when requirements go beyond those catered for by Barco.  Transpact also offers attractive pricing:  at £2.99 per transaction a low-transaction relationship could result in excellent value for money. Despite the myriad alternatives available there is much to be said for an industry-tailored solution, and it was for this reason that Cotswold Barristers chose to use BARCO in the largest direct access representative action this country has ever seen.  Designed for barristers to use straight out of the box, and with all the peace of mind that comes from using the industry-approved solution, BARCO has provided the final piece of the jigsaw in serving the public directly.

Direct Public Access Barristers with Fixed Fees