Whether judgment should be ordered in dollars or sterling/appropriate rate of interest
Given the current rates of exchange for sterling, it is increasingly important for defendants to know in which currency the judgment sum will be expressed and which exchange rates should be used. The White Book notes that a judgment can be given in a foreign currency or its sterling equivalent at the time of payment. Prior caselaw has established that damages should be calculated "in the currency in which the loss was felt" by the claimant (see The Canadian Transport ).
Here, the judge had identified the recoverable sum in the main judgment as USD 11 million approximately, and the defendant sought an order that the judgment be expressed in sterling and should be calculated in accordance with the exchange rates set out in the claimant's own evidence at trial. Coulson J agreed, on the basis that all the relevant sums paid in the case, and all the figures mentioned in contemporaneous documents, had been in sterling.
A further issue was the applicable rate of interest. The court will ask what rate of interest the claimant would have had to pay in order to borrow money to replace the money which he has been kept out of. In this case, the claimant sought to recover sub-prime borrowing rates ie the rate applicable to a small hypothetical company "whose only business was a development of a new resort in the Caribbean, seeking to raise funds in sterling and in the UK and which could not offer security" (namely, around 12-15%). The judge held that such a comparison was "artificial and unhelpful" because "The claimant did not borrow money and, on the balance of probabilities, I find that it would never have been lent any money because of its complete lack of financial security and credit-worthiness... It would be wholly wrong in principle for the claimant now to take advantage of their own sub-sub-prime status to increase the recoverable interest rate".
The defendant was ordered to pay 1.5% above base for the relevant period.