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COSTS: Interesting times

28 April 2017  

After the discount rate cut, Paul Jones predicts increased legal disputes over interest on legal costs

While the legal and insurance professions come to terms with the slashing of the discount rate from 2.5% to -0.75%, the issue of interest rates on legal costs, while much less of a headline grabber, continues to be an important consideration for costs practitioners. Indeed, while the discount rate now languishes in the negative and the special account rate is not much better at 0.5%, the interest rate for legal costs judgments remains at a very healthy 8% where it has been since 1 April 1993. So how did this huge differential come to pass and what are its effects?

Additional Info

  • Case(s) Referenced:

    Fiona Trust & Holding Corporation v Privalov [2011] EWHC 1312 (Comm)

    Gray v Toner (2010) unreported, (Liverpool County Court, 11.11.10 HHJ Stewart), 11 November

    Hunt v AM Douglas Roofing [1990] 1 AC 398

    Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2834 (Comm)

    Powell v Herefordshire Health Authority [2002] EWCA Civ 1786

    Schlumberger Holdings Ltd v Electromagnetic Geoservices AS [2009] EWHC 773

    Simcoe v Jacuzzi Group [2012] EWCA Civ 137

    Yae Essaie Moto v Trafigura [2011] EWHC 90206 (Costs)