Legal Updates

Commercial Law – Litigation – Raising Interest – Compound Interest

The decision in the case of Sempra Metals Ltd (Formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners and Another [2007] has had a noticeable impact on commercial litigation with regards to raising interest in that compound interest is repayable in restitution. The House of Lords judgment has meant that companies are now able to claim back compound interest:

“The court had power to make an award of compound interest in a claim for restitution where such an award was necessary to achieve full justice for the claimant.”

The reason that the decision in this case will have a significant impact on commercial litigation is that it will lead to higher recoveries, especially in cases where sums have been outstanding for extended periods of time. Although the previous practice of claiming statutory interest prior to the judgment will continue, many claimants will now have the additional option of claiming compound interest above their statutory interest awards.

Please contact us for more information at


© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.


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