A BEREAVED son has exposed a loophole that allows solicitors to keep interest accrued while dealing with inheritances as "a charter encouraging lawyers to commit fraud".

Jim Clarke, 69, believes thousands of Scots whose relatives have died leaving behind money may be affected after he got nothing for the six months the £240,000 estate of his late mother Agnes spent in an account set up by his solicitor.

Legal firms have been officially told they are entitled to hold on to interest on estates' investments if the payback amounts to less than £100.

However, solicitors are permitted under a new rule laid down by the Law Society of Scotland to keep "small amounts" of interest from money left with their firm's client accounts.

The professional body for lawyers says the sums help cover administration and other costs involved in setting up an account for money left behind by a dead person.

Chartered accountant Mr Clarke, of Ayr, a former chairman of the Scottish Local Authorities Chief Internal Auditors Group, now plans to take up the issue with MSPs

Mr Clarke made the discovery after his mother Agnes, of Milngavie, East Dunbartonshire, died aged 91 last year.

He was happy to leave the handling of Agnes's estate – her £190,000 home and various investments totalling £50,000 – to solicitors McVey and Murricane. When it was finalised he noticed there was no interest.

After months of wrangling with the law firm, Mr Clarke said his mother's estate had gained just £67 in an account that earned 0.25% interest.

He had made his own inquiries with high street banks and estimated that in that time he could have gained about £400 in interest at current rates of about 1.5%.

Although he had complaints to the Law Society of Scotland and the Scottish Legal Complaints Commission rejected, Mr Clarke is now determined to raise the point of principle.

He is convinced the rule could encourage unscrupulous solicitors to "under invest" for their own gain.

Mr Clarke said: "I think that the people of Scotland do need to know about this and should challenge it. It is nothing less than a charter encouraging any solicitor who might have any inclination whatsoever to commit fraud to do so.

"It gives no incentive to invest money for their clients. And where is the intermingling cash ending up? I can't afford to take it to court but I can take it to parliament."

Two-thirds of householders in Scotland own their own home and the average value of estates left by homeowners is between £150,000 and £250,000.

Allan Radlow, senior partner at Glasgow-based McVey and Murricane, said: "We dealt with an estate which presented challenging aspects, objectively, we believe, well and efficiently.

"All funds relating to the estate were dealt with in conformity to the rigorous rules set by the Law Society of Scotland."

A spokesman for the Law Society of Scotland said: "Solicitors are permitted to keep small amounts of interest earned from monies placed in their firm's client account.

"The reason behind this is to ease administrative processes and associated costs of setting up an individual account for every client a solicitor has.

"In November 2011, the Law Society Council agreed that if interest earned was not likely to exceed £100, it could be retained by the solicitor firm."

Solicitors must hold a final accounting record for all transactions, the society added.