Claiming pre-judgment interest

One of the issues in this case was whether the successful party was entitled to pre-judgment  interest, despite no claim for interest having been pleaded. Blair J held that, although it is  usual practice to plead a claim for statutory interest, this is not a pre-condition to the court  making an award of such interest. However, a contractual claim for interest (as was the case here)  must always be pleaded: “Where a contract provides for the payment of interest, the agreed terms  will normally displace the court’s discretionary power to award interest under s. 35A Senior Courts Act 1981...This means that, where the contract itself fixes interest, the court can only  enforce that provision: its statutory power does not override the contractual provision, so that it cannot fix a different  interest rate”.

However, Blair J went on to reject a “technical approach” to pleading contractual interest. So, for  example, if the pleadings fail to specify the agreed rate of interest, that will not be important.  However, here there was a dispute of substance (since interest had not been pleaded at all). Nevertheless, the judge gave the relevant party permission to amend its pleadings to include that  claim for interest, since he concluded that there was a real prospect of success for the claim.