November 15, 2018

Brent LBC v Davies: Calculating Discretionary Interest

Court considers discretionary interest issue

The court has a discretion as to the date from which interest will run up to judgment. Usually it will be from the date that the cause of action arose, but the court might decide not to award interest for periods when the claimant delayed bringing or pursuing his/her claim.

In this case, the claimant had delayed bringing a claim between April 2009 (when it discovered it had a cause of action) and July 2014 (when proceedings commenced). Zacaroli J accepted that this was a significant period of delay and that the claimant should have been in a position to commence its claim by late 2010. Nor could it be said that the entire delay was justified because the civil claim would have had to have been stayed pending determination of related criminal proceedings. The judge concluded that there had been unreasonable delay of about two years here.

However, he refused to exercise his discretion regarding the date from which interest runs in relation to some of the defendants because: (a) the claimant was seeking a relatively modest rate of interest (1% above base); (b) the defendants had had use of the money which they had been overpaid); and (c) the delay had worked to their advantage as certain claims against them had become time-barred. (Other defendants, who had not been overpaid but were liable to account for payments made by others, and who did not benefit from limitation arguments, were entitled to an exclusion of interest for the 2 year period of unreasonable delay).