Claiming Interest


This is a question that people frequently ask me and the simple answer is yes.

In the Court of Appeal case of Carrasco v Johnson, Lord Justice Hamblen clarified the position.

  • Interest is not awarded as compensation for damage done but for the claimant being kept out money that ought to have been paid.
  • It should always be remembered that the court has a discretion as to the rate to be awarded and the period on which it is payable.
  • It should be remembered that the court will have regard to whether the monies due are from individuals or a commercial party.

There are three types of interest claims:

  1. Contractual – where there is a clause within the company’s terms and conditions of business saying that if payment of invoices are not made within terms, interest will become payable at the rate of 4% above the bank’s base rate from the date of default until full payment is received;
  2. Under S69 of the County Courts Act 1984 or section 35A of the Senior Courts Act 1981 (formerly Supreme Court Act 1981) at the rate of 8% per annum. A claim for simple interest on a debt or damages under these statutes is discretionary. As it is for the court to award interest at such a rate and for such a period as it deems fit, it is always worthwhile challenging both the period and the rate of interest claimed.
  3. Interest under the Late Payment of Commercial Debts (Interest) Act 1998. This will only apply business to business. The Late Payment Act inserts an implied term in the contract, giving the creditor a right to simple interest on the price, plus a fixed sum and reasonable costs of recovery. Interest will be 8% per annum above Bank of England base rate.

For advice on any debt recovery matter, speak to our specialist team by phoning 01782 205000 or email me at