Help plz - RBS

[trez]

I noticed that in the Scottish guide on the court papers it says:

'The pursuer claims interest at the judicial rate of 8% annually on each charge from the date each charge was applied'.

I have been told by a RBS solicitor that this is not right and judicial interest is only awarded from the date of citation. Could someone please clarify this for me.

[Amethyst]

The RBS solicitor is correct and will double triple check the reasoning for claiming from date charge applied in the template.

This may be of interest, and the reasoning behind it may stem from this however I do not believe it is a legally arguable point as yet.

Why can interest on contractual debt only be demanded from “the date of citation”?



Because, according to Scots case law, it is only when a judicial demand has been made that the money can be said to be “wrongfully withheld”, creating an entitlement to demand interest. This unsatisfactory situation, which arises out of the reliance which the courts have placed upon certain dicta – mainly obiter – in two 19th century cases, Carmichael v Caledonian Railway Co (1870) 8M (HL) 119 and Blair’s Trs v Payne (1884) 12R 104, is peculiar to Scots law. Fossilisation of the judicial demand rule was completed in Dean Warwick Ltd v Borthwick 1983 SLT 533, when the court observed: “There is here a rule of law, a rule that interest runs from citation, and one which does not admit of modification by the exercise of judicial discretion.”


Subsequently, Lord Hamilton, delivering the opinion of an Extra Division in Elliott v Combustion Engineering Ltd 1997 SC 126 at 133, observed: “It may be a matter of concern that in modern commercial contexts the law does not in general allow for interest to run on debts from a date earlier than judicial demand. However, reform of the law on interest on debt is a matter for the legislature, as was reform of the law on interest on damages.”
This suggestion was taken up in a reference by the Scottish Ministers to the Scottish Law Commission in November 2003, inviting the Commission to make recommendations as to possible reform of the law relating to intereston claims for payment of money from contractual and other obligations. The Commission’s Report on Interest on Debt and Damages (Scot Law Com no 203), including a draft bill, in response to this reference has now been published, and is available on the Commission’s website at www.scotlawcom.gov.uk/downloads/rep203.pdf .

Will come back to you to confirm. Thankyou for bringing it to our attention.

[trez]

Help plz - RBS

Many thanks for that Amethyst, very helpful. :o