Should I Still Claim Interest in the Current Climate?

When the subject of issuing proceedings against a non-payer comes up, clients often ask us whether they should claim interest (and compensation/costs) from the debtor.

With the current climate and rising costs, the question seems evermore important – particularly from a morale standpoint.

Whilst it is ultimately the client’s choice, our advice is always the same and that is that they should claim interest and any other associated costs. There are several reasons for this:

  1. The provisions to do so are there for a reason – particularly when claiming under statute, the law dictates that you are entitled to do so. If law makers or the government did not intend or want a creditor to be compensated for their inconvenience, then the laws would be amended as such. It is not unusual for temporary restrictions to be placed on certain legal processes at times at hardship and so if there are no restrictions, you can proceed as normal

  2. Bargaining positions – claiming interest gives you a better bargaining position, particularly where matters go to mediation or are disputed on minor points. Often, clients just want to recover the invoice balance and therefore may be amenable to waiving interest in view of an early settlement

  3. Harder to add it on later – it’s a lot easier to plead in your claim an entitlement to interest, then plead nothing and later try to recoup it

  4. Final say – ultimately, the judge at a hearing will have the final say on interest. If they don’t agree with what’s been claimed, they will make the appropriate decision

If you are unsure on any aspect of a debt matter that you have, we are always happy to have a no-obligation chat so please get in touch with any queries.

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