Contract
Houssein and others v London Credit Ltd and others [2026] EWCA Civ 830
The Court of Appeal, Civil Division, dismissed the appellants’ appeal against the remitted decision finding that the appellants’ refinancing proposals did not stop interest running and that the contractual default interest rate (4% per month compounded) was not an unenforceable penalty. The appeal concerned a secured loan facility of £1,881,000 granted by London Credit Ltd (LCL) to CEK Investments Ltd (CEK), guaranteed by Mr and Mrs Houssein. Following a first trial in 2023, the judge held the default interest rate was a penalty, but LCL successfully appealed. The matter was remitted for reconsideration. At the remitted hearing, three issues arose: whether the borrowers had done enough to stop interest running on the loan; whether the default interest rate of 3% per month above the standard rate (totalling 4% per month compounded) was a penalty; and if so, whether LCL was entitled to statutory interest. The Court of Appeal held, among other things, that the borrowers’ offers of settlement
