Appropriate rates of interest where claimant beat its own Part 36 offers (Commercial Court)
In a regular slot, Beverley Barton, Senior Editor in the Practical Law Dispute Resolution team, selects a case of particular interest reported on by Practical Law during the previous month.
Subscribers to Practical Law Dispute Resolution can access further analysis and practical guidance on this case, and other judgments, on the Practical Law Dispute Resolution website (www.practicallaw.com ).
In AssetCo Plc v Grant Thornton UK LLP  EWHC 592 (Comm), the Commercial Court assessed the rates of interest, on costs and damages, to be awarded to a claimant that had beaten its own Part 36 offers.
This case is a noteworthy example of how the court will decide the appropriate rates of compensatory and enhanced interest in such circumstances and where the litigation has been hard fought but there is nothing to take it “out of the norm” in terms of the defendant’s conduct.
The court held:
- For the compensatory rate of interest on damages, the appropriate base rate was three month LIBOR, which was a standard reference rate for commercial borrowing. The appropriate percentage over the base rate was 2% , producing a blended rate of three month LIBOR plus 2% for the requisite period (paragraph 27, judgment).
- Taking all of the relevant factors into account, the enhanced rate of interest on damages was set at 5% above LIBOR.
- It was appropriate for the rate of interest on costs to be the compensatory rate applied in this case, namely three month LIBOR plus 2%.
In reaching his decision on the enhanced rate of interest, Bryan J considered the Court of Appeal’s decision in OMV Petrom SA v Glencore International AG  1 WLR 3456, noting that, although it provides valuable guidance, it has limitations in that it was a case on extreme facts, which resulted in an enhanced rate of 10% above base rate being awarded (paragraphs 30-32, judgment).
Other points to note include:
- The defendant was refused permission to appeal but allowed a stay pending its application for permission to appeal to the appeal court, conditional on paying the judgment sums into court. Paragraphs 54-67 of the judgment contain a helpful summary of the law on stays of execution pending appeal.
- The judge exercised his power under PD 47.5.1(a))(iii) and waived the requirement for the claimant to submit an electronic bill of costs.
- The judge allowed the defendant to adduce expert evidence for which no permission had previously been given.
AssetCo Plc v Grant Thornton UK LLP  EWHC 592 (Comm) (22 February 2019) (Bryan J).