Since January 1, 2016 new regulations have been in force regarding interest payments. The act of 9 October, 2015 came into force then regarding amendments to the act on the terms of payments of commercial transactions, the civil code as well as other acts, further the “Amendment” (Journal of Laws from 2015 item 1830). A principle reason for the enactment of the Amendment was to adapt national legislation to the European Directive 2011/7/EU on combating late payment in commercial transactions. At this point, however, I would like to focus on “when the opportunity arises” changes made to the Civil Code in relation to statutory interest. These are important changes from the practice point of view, and not only from the procedural viewpoint.
To put it briefly: for years “interest on capital” functioned , i.e. the interest rate in the strictest sense of the word for the use of money (Art. 359 of the Civil Code) and default interest, i.e. compensation for the delay in meeting the payment of money (Art. 481 of the Civil Code). If there was an obligation to pay interest, without specifying its rate, the debtor paid statutory interest, the rate of which was established by the ordinance of the Council of Ministers uniformly for capital interest and for default interest.
This approach has often been criticized. It was pointed out that the same rate of interest for the different categories of interest is not justified, as they perform different functions. Interest on capital is only a return for the use of capital, while default interest should motivate the debtor to fulfill its obligations timely and compensate for the loss suffered by the creditor as a result of the default. In this respect, therefore, the need for a differentiated rate of interest was called for, with a higher rate for being in delay. At the same time, the method of determining the interest was criticized as being anachronistic and detached from market realities. A similar position was held by the legislator. In order to maintain coherence in the calculation of interest in the course of civil law, the amendment introduced a mechanism of calculating the interest, respectively changing Art. 359 of the Civil Code and Art. 481 of the Civil Code. The interest rate is determined by referring to the current reference rate of the Polish National Bank (from 5 March 2015, 1.5%) increased for capital interest by 3.5 percentage points and in the case of default interest by 5.5 percentage points. Currently, these percentages are respectively 5% and 7% per annum.
It should be borne in mind, however, that the changes concern also how the interest is named. Currently “statutory interest” means solely capital interest; while default interest is defined as “statutory default interest”.
From a practical point of view certain difficulties arise. So far, there was an established way of formulating a claim with a demand to award statutory interest, which was uniformly understood. And what about a situation where a case was initiated before 1 January, 2016 with the verdict due after the entry into force of the Amendment? How will the courts assess such a demand formulated under the previous rules? This issue has a measurable financial impact on the winning party in the process. The transitional provisions do not provide a clear answer in this matter, except to say that the interest payable for the period ending prior to the date of entry into force of the Amendment, the existing provisions will prevail, while the practice of the courts is not uniform.
On the one hand judgments are given which automatically award from 1 January, 2016 statutory interest for the default, using as the basis Art. 481 § 2 of the Civil Code. At the same time, some judges believe that in order to obtain a verdict on the interest on those grounds, the party needs to clearly demand this, thus change/refine its initial demand concerning the interest. Otherwise, the courts assume that for the period from 1 January, 2016 statutory interest should be awarded within the meaning of Art. 359 of the Civil Code. Proponents of this approach believe that adopting a contrary standpoint would be unlawfully exceeding the demand (Art. 321 of the Code of Civil Procedure)
If follows then from the above that until a uniform stance is established regarding this issue, for cases pending before 1 January, 2016, it would be prudent to properly modify the claim for interest. Nevertheless, for claims filed in the current legal environment, one must be very cautious and precise so that a claim for statutory interest is not submitted as was done in the ‘old days’.