By Tony Johnson - 8 Aug 2018
The Interest On Money Claims Act 2016 (which came into
force this year) has changed the basis on which all Courts award
interest on money claims. This is good news for plaintiffs.
Previously, the courts generally only awarded interest from the
date of filing of a claim, the rate was fixed and compound interest
was not allowed (unless specified in a prior agreement).
The purpose of the change in the way the court considers
interest claims is to more accurately reflect the realistic cost to
a creditor of the delay in receiving payment of monies rightfully
due.
There are three substantial changes:
- The applicable interest rate fluctuates with changes in the
retail six month term deposit rate.
- Interest is to now be payable from the date on which the money
claim is quantified until date of payment.
- Interest is now to be compounded.
All three changes are of substantial benefit to a plaintiff. Of
particular note is compounding interest. Although the retail term
deposit rate may be less than the existing court rate, any debt
that is outstanding for a reasonable period of time escalates
quickly with compounding interest. The result is a much fairer
return for a creditor.
If you consider you may have a valid claim and are considering
bringing that claim (including your interest entitlement) Martelli
McKegg has a large group of litigation lawyers able to assist
you.
Contact
Tony
Johnson
The purposes of the change in the way the Court considers
interest claims is to more accurately reflect the realistic cost to
a creditor of the delay in receiving payment of monies rightfully
due.
The three substantial changes are the following: