Interest - Carrasco V Johnson

Court of Appeal confirms basis for awarding discretionary interest to an individual claimant

When a court awards debt or damages, it has a discretion to also award simple interest, pursuant to section 35A of the Senior Courts Act 1981. In this case, the claimant (an individual) appealed against an award of 3% per annum, and the Court of Appeal re-affirmed the following principles to be applied when a court assesses the rate of pre-judgment interest to be applied:

1. Interest is awarded to compensate claimants for being kept out of money, rather than to compensate for damage;
2. The court will consider the position of persons with the claimant's general attributes and the court does not inquire into the detailed financial position of the claimant;