Kerry Underwood

PART 36: ADDITIONAL AMOUNT DOES NOT ATTRACT INTEREST

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

FZO v Adams & Anor [2019] EWHC 1286 (QB) (23 May 2019)

the Queen’s Bench Division of the High Court held that interest is not payable on the 10% damages uplift prescribed by CPR 36.17(4)(d) when a claimant matches or beats its own offer at trial.

Although this case involved the maximum uplift of £75,000, the interest issue was not decided on that point, that is that the addition of interest would have caused the maximum to be exceeded.

Consequently if the uplift is say, £50,000, no interest is payable, even though the total would not exceed the maximum of £75,000.

CPR 36.17(4)(a) provides for interest to be paid “on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting at the relevant date”.

The claimant here submitted that that was widely drawn and included the additional payment as well as the basic judgment sum.

If it was intended that interest should be excluded from the payment, then the rule would say so and this is consistent with CPR 36 which is intended to encourage offers to settle by claimants.

The defendants argued that the additional amount is not a “sum awarded” as it does not feature in the court’s judgment and that the words “ additional” and “amount” clearly show that this is a further financial sanction to  be paid by the unsuccessful defendant in addition to the enhanced interest on the damages, costs on the indemnity basis and enhanced interest on costs to which the claimant is entitled.

To award enhanced interest on this sum will be to impose a sanction on a sanction, and to do that the rule would have to be drafted to make it clear.

The High Court accepted the defendant’s interpretation and noting that where interest is payable consequent to any other paragraph of CPR 36.17(4) on any amount, it is specifically stated.

Written by kerryunderwood

May 31, 2019 at 7:39 am

Posted in Uncategorized

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