Solicitor held my money for 20 years should I get interest on top of the capital amount

delilahdelilah

hi Section62

Thanks for your advice and taking time to reply …

delilahdelilah

https://forums.moneysavingexpert.com/discussion/comment/81997997#Comment_81997997

thanks Section62 for your reply …. Considering my options great to get more advice from here

GDB2222

I agree with Section62 that it is not very convincing if you choose a compound interest rate without being able to justify it.

However, you might be able to justify using the interest rates on your mortgage, rather than the interest rate you could have earned if you had put the money on deposit. Have you had a mortgage during most of this period?

delilahdelilah

https://forums.moneysavingexpert.com/discussion/comment/81998080#Comment_81998080

thanks GDB2222

Thank you for your helpful comment.

Yes, I did have a mortgage until 2017. Had I received the £3,367.40 when it should have been paid to me, it is very likely that I would have used it to reduce my mortgage balance or for other financial purposes.

I have not attempted to calculate precisely what impact that would have had on my mortgage interest over the years, but I do feel that the financial effect may have been greater than simply the interest that might have been earned on a savings account

Thank you again for your suggestion.

GDB2222

If it were me doing the calculations, I'd calculated base rate + 2% up to 2017 and base rate + 1% after 2017. That represents mortgage interest up to 2017 and savings interest after 2017.

I'd probably do this in a spreadsheet, compounding monthly, using the base rate data Section62 linked to.

But, if you are less keen on large spreadsheets, you could just take a guess at an average interest rate and do the compound interest calculation based on that. I wouldn't be surprised if it works out at around 3% or so.

I think you are entitled to some additional compensation for the annoyance and inconvenience, but that's typically fairly modest and just a figure like £200. So, I'd ask for that, too, but your main loss is the financial one.

MeteredOut

I previously (over 2 years ago!) did 3 separate set of calculations for the OP, based on a starting pot of £3,500 and using the average BoE rate over each year, the average BoE rate over each year minus 2% (with a 0.1% floor) and the average BoE rate over each year + 4%

https://forums.moneysavingexpert.com/discussion/comment/80754098#Comment_80754098

https://forums.moneysavingexpert.com/discussion/comment/80754116#Comment_80754116

https://forums.moneysavingexpert.com/discussion/comment/80755186#Comment_80755186

delilahdelilah

https://forums.moneysavingexpert.com/discussion/comment/81998706#Comment_81998706

hello MeteredOut yes Thankyou I will look back through the messages I remember - and appreciate - your huge effort and will go back through the messages. It has been shelved for a period for unavoidable circumstances and is now reopened to discuss and hopefully come to an agreement to finally settle this

Thankyou again for your previous help and again replying to the thread

saajan_12

Remind us, have they paid the original amount at least? I'd get that in hand before going further to reduce your risk, and there's no need for them to hold on to it longer.

Re what rate to use, I think either of the below could be justifiable

a. BoE Base rate compounded over time - that's the rate most mortgages and savings are based on, so is a conservative estimate of what you would have gotten risk free; or

b. Flat 8% simple interest which is the statutory rate a court would apply. Note while the % looks high, this is partly because there is no compounding with simple interest, so won't end up crazy high. If the starting was £3,367 then that's £269.36 per year ie £5,926 after 22 years.

delilahdelilah

https://forums.moneysavingexpert.com/discussion/comment/81998945#Comment_81998945

Thank you, saajan_12.

That is very helpful and confirms my understanding that the 8% simple interest calculation alone would amount to approximately £5,926 over 22 years based on the withheld sum of £3,367.40.

As I understand it, that figure relates only to the financial loss arising from being deprived of the money and does not include any additional amount for the inconvenience, distress and time involved in pursuing the matter over such a long period.

The original sum has now been repaid, but the current offer to resolve my complaint is £3,500.

I am very grateful to you and the other contributors for taking the time to explain the different approaches to calculating the loss. It has been extremely helpful in giving me a clearer understanding of what may be a reasonable settlement figure

Section62

https://forums.moneysavingexpert.com/discussion/comment/81998991#Comment_81998991

As I understand it, that figure relates only to the financial loss arising from being deprived of the money and does not include any additional amount for the inconvenience, distress and time involved in pursuing the matter over such a long period.

I wouldn't say you shouldn't get anything for this, but as I understand it you didn't know anything about the money until sometime in March/April 2024, and it was the solicitors who got in touch with you to confess they still had money which belonged to you. Therefore there would have to be something exceptional for the 'long period' of inconvenience/distress/time extending further back than when the solicitor first contacted you in 2024.

I'm not blaming you in any way, but you've indicated that some kind of personal circumstances* have got in the way of this being resolved sooner - so in terms of the roughly two years since April 2024 you'd need to be fair with the solicitor if some of the delay was outside their control. (*e.g. the comment a couple of posts back that it had been "shelved for a period for unavoidable circumstances")

On the basis of what I've read it sounds like a payment of a couple of hundred pounds or so (in addition to the interest) is the kind of ballpark you could argue for.