Foreign currency court funds rules start 19 Jan 2026

If you’ve ever asked what happens to money a court holds during or after a case, here’s the short version: it goes into ‘court funds’ managed by the Accountant General of the Senior Courts. New rules clarify how that money is handled, especially when it’s not in pounds. They were made on 4 December 2025, laid before Parliament on 8 December 2025, and take effect on 19 January 2026 across the Senior Courts, County Court and Family Court in England and Wales, signed by Lord Chancellor David Lammy with the Treasury’s agreement.

When we talk about ‘funds in court’, we mean money paid in because a judge ordered it, because a settlement for a child or protected party must be safeguarded, or because a party offered payment to settle a claim. That money is held centrally and invested under court directions so it’s protected until the court says who should get it back. The Court Funds Rules 2011 set the ground rules for this system and name the Accountant General as the official responsible for day-to-day management.

What’s changing now is clarity. The 2025 amendment says which provisions apply to sterling and which to foreign currency. For foreign-currency deposits, the Accountant General must either follow a court’s payment schedule or other directions to invest or reinvest, or, if there are no such directions, place the money in an interest-bearing account in that same currency that allows withdrawals at any time without penalty. If that isn’t possible, the Accountant General must ask the court for directions.

Interest rules are also tidied up. Interest will be credited without deducting income tax, which means recipients (or their representatives) may have to handle any tax reporting themselves later. For sterling, interest accrues daily by default. For foreign currency, interest accrues under the terms of the relevant account and is credited when the bank credits it, when money is reinvested, or when the account is closed-unless the Accountant General decides otherwise.

There are two more practical touches for foreign currency. First, any bank charge incurred in placing money into a foreign-currency account will be paid from that account. Second, unless a court, deputy or investment manager directs otherwise, any dividend received in a foreign currency will be converted to sterling and the proceeds invested according to the rules. These are operational details, but they matter for accurate balances and clean audit trails.

Behind the scenes, the drafters have removed rule 16 (the old foreign-currency rule) and rehomed its substance in the interest and investment rules so readers can see sterling and foreign-currency provisions side by side. Rule 14 is also clarified to make clear it deals with investment in sterling only. This is about making the book of rules easier to teach, follow and apply.

There’s a small but student-favourite point about settlements. When a Part 36 offer is accepted and money has been paid into court, the Civil Procedure Rules allow payment out without asking the court again-if the defendant agrees the money can be used to satisfy the offer. The 2025 amendment updates the Court Funds Rules to let the Accountant General act on a written request from the claimant or written confirmation from the defendant, and to accept electronic versions where electronic processes are in play. An older extra requirement for a letter from an executor in certain cases is removed, which should mean quicker payments.

So what does this mean for you? If you’re handling damages in euros or dollars, the money should sit in an accessible interest‑bearing account in that currency unless the court says otherwise, with any bank fees coming from the fund itself. Interest may not post daily as it does for sterling; it follows the account terms, so timing of credit matters. If a suitable account in that currency doesn’t exist, the Accountant General must go back to the court for instructions, which is a safeguard for parties.

Why the refresh now? The official notice for this instrument says it is made in consequence of a defect in S.I. 2023/987 and is being issued free of charge to recipients of that earlier instrument. The Joint Committee on Statutory Instruments had previously reported the 2023 rules for defective drafting, and a separate 2023 amendment fixed one part of the problem. The 2025 rules add clearer treatment for sterling versus foreign currency and streamline the paperwork around payments out. This is a useful case study in how Parliament tidies secondary legislation after feedback.

If you’re teaching this, anchor dates and scope: made 4 December 2025, laid 8 December 2025, in force 19 January 2026; applies in England and Wales; covers the Senior Courts, County Court and Family Court. Use a quick exercise: compare how interest is credited for £-denominated funds versus a euro account and ask who bears charges and exchange risk. Then discuss how CPR 37.3 interacts with the payment‑out process once a Part 36 offer is accepted.