Appropriate Rate Of Interest - Section 35A Senior Courts Act 1981
Section 35A of the Senior Courts Act makes provision for simple interest to be paid on debts or damages from the date of the cause of action until the date of judgment (or payment if sooner) at such rate as the court thinks fit or as rules of court provide.
In this case, the Defendant was found liable to pay monies which had been held by the Defendant’s solicitors pending an appeal.
The court has a wide discretion as to the amount of interest to be awarded and, in reaching his decision to award 3% above base rate, the Judge set out a useful consideration of case authorities.
- Tate & Lyle [1983] UKHL 2 - In commercial cases, interest should reflect the rate at which a claimant (with the general attributes of the particular claimant) would have had to borrow money. 1% over base rate awarded.
- Claymore Services [2007] EWHC 805 (TCC) citing Shearson Lehman Hutton Inc v MacClaine Watson & Co Ltd (No 2) [1990] 3 All ER 723 - Commercial Court practice can be displaced if it would be substantially unfair to a party. The burden is on the party seeking to displace it. 2% over base rate awarded.
- Attrill v Dresdner Kleinwort [2013] EWCA Civ 394 - Individuals cannot usually borrow at the same rates as commercial organisations. The appropriate rate was the cost of unsecured borrowing by individuals (5% above base rate).
- Sycamore Bidco v Breslin [2012] EWHC 3443 (Ch) - There is no longer a presumption that interest should be at 1% above base rate.
- Challinor v Juliette Bellis & Co [2013] EWHC 347 (Ch) – This case distinguished between commercial cases (the rate that a claimant of the relevant type would have paid to borrow would apply), cases where any award is an addition to the claimant's damages because the claimant has suffered a non-pecuniary loss, such as personal injury, (the rate for money on deposit would apply) and cases where the claimant is not running a business that depends on credit but the loss of money is likely to deprive the claimant of other opportunities (3% over base rate awarded).
Posted on 01/01/2016 by Ortolan
