The Courts Act 1981 (Interest on Judgment Debts) Order 2016 (SI No 624 of 2016) came into operation on 1 January 2017. The effect of this instrument is to reduce the rate of interest payable on judgment debts from 8% to 2%.
The order was made under s20 of the Courts Act 1981 which permits the Minister for Justice and Equality to vary the amount of interest payable on judgment debts if satisfied that the rate should be varied having regard to the level of rates of interest generally in the State. The Minister had indicated in mid-2016 that she intended to review the rate.
This move will be welcomed by judgment debtors as it was widely perceived that the 8% rate which had applied since January 1989 was punitive and no longer reflected current rates. It remains to be seen however, whether successful litigants will regard the rate as taking account of the real opportunity cost of awaiting payment of funds, perhaps for a significant period of time.