Awarding interest:Claymore Services Ltd vs Nautilus Properties Ltd

Reference

Mr Justice Jackson held that interest should only run from the date when the sum due is ascertainable. In this case, for the quantum merit claim, it was from the time Claymore’s final account had been presented to Nautilus and they had been given a reasonable amount of time to appraise it.

When considering Claymore’s delay in commencing the present action and whether interest should be recoverable during that period, he found that the delay which occurred between the date of the adjudicator’s decision and the date of the letter of claim was excessive. Therefore, as Claymore was guilty of one year’s unreasonable delay, the interest payable during this period would be reduced by 50%.

Jackson then went on to consider the appropriate rate of interest and held that the Judgments Act rate of interest (8%) is not appropriate in the commercial context of a dispute between two businesses. “The Judgments Act rate does not reflect the loss to the claimant from being kept out of its money.” He therefore used his discretion and awarded interest at 2% over base rate.

Permission to appeal was refused.

Full case details: Claymore Services Ltd vs Nautilus Properties Ltd [2007] EWHC 805 20 March 2007, TCC, HHJ Jackson

Postscript

The judge decided in this case that the interest should reflect the actual commercial business losses. He held that the best way to do this was to award 2% over base rate, rather than the usual 8% overall. In addition, he also took into account the delay by the claimant in pursuing their claim. In this case, he decided that there was an unreasonable delay of about one year. He therefore reduced the interest by 50% during that period.

The case serves to demonstrate that Judges are willing to take into account the circumstances of a particular case and the nature of the parties when awarding interest, rather than simply award the usual judgment rate of 8% across the entire period.