Lance M Dodgson discusses recovering interest on special damages
Courts routinely award interest on special damages at eight per cent in personal injury matters despite case law advocating the adoption of the special account rate.
Given the inconsistent court practices, the appropriate award for interest can cause a number of difficulties for lawyers seeking to provide clear advice. In the current turbulent economic climate, interest can and does make a substantial difference to the amounts recovered on behalf of Claimants and must not be undervalued.
The inherent judicial power to award interest is contained in the Senior Courts Act 1981 (SCA 1981), s 35A, for High Court cases, and the County Court Act 1984 (CCA 1984), s 69, for county court cases. The SCA 1981 and CCA 1984 regrettably fail to provide any guidance on the rate and period concerning the award of interest. The courts however have a wide discretion to determine whether interest is to be awarded, the period of interest and the rate of interest. Case law states that the
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