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Following on from scars thread, thought it might be a good idea to trash out the legalities of post interest application to debts.
Many credit agreements include a clause to allow for interest to continue to be charged post judgement, and after default.
Judgements are often handed down with ' ''together with any further interest becoming due...'' specified.
This allows companies with CCJs and charging orders against you to keep adding interest as allowed for in their original agreements.
so how to get interest stopped at the point of judgement ?
whats the legalities surrounding this ?
and so on.
this is from Director General Fair Trading v First National
12. In agreement with the judge and the Court of Appeal, I do not accept the bank's submission on this issue. The regulations, as Professor Sir Guenter Treitel QC has aptly observed (The Law of Contract, 10th ed, 1999, p 248) "are not intended to operate as a mechanism of quality or price control" and regulation 3(2) is of "crucial importance in recognising the parties' freedom of contract with respect to the essential features of their bargain" (ibid, at p 249). But there is an important "distinction between the term or terms which express the substance of the bargain and 'incidental' (if important) terms which surround them" (Chitty on Contracts, 28th ed, 1999, "Unfair Terms in Consumer Contracts", p 747, para 15-025). The object of the regulations and the directive is to protect consumers against the inclusion of unfair and prejudicial terms in standard-form contracts into which they enter, and that object would plainly be frustrated if regulation 3(2)(b) were so broadly interpreted as to cover any terms other than those falling squarely within it. In my opinion the term, as part of a provision prescribing the consequences of default, plainly does not fall within it. It does not concern the adequacy of the interest earned by the bank as its remuneration but is designed to ensure that the bank's entitlement to interest does not come to an end on the entry of judgment. I do not think the bank's argument on merger advances its case. It appears that some judges in the past have been readier than I would be to infer that a borrower's covenant to pay interest was not intended to extend beyond the entry of judgment. But even if a borrower's obligation were ordinarily understood to extend beyond judgment even in the absence of an independent covenant, it would not alter my view of the term as an ancillary provision and not one concerned with the adequacy of the bank's remuneration as against the services supplied. It is therefore necessary to address the second question.
Theres also references in the county courts act...
s69 is about courts powers
and section 74
74 Interest on judgment debts etc
(1)The Lord Chancellor may by order made with the concurrence of the Treasury provide that any sums to which this subsection applies shall carry interest at such rate and between such times as may be prescribed by the order.
(2)The sums to which subsection (1) applies are—
(a)sums payable under judgments or orders given or made in a county court, including sums payable by instalments; and
(b)sums which by virtue of any enactment are, if the county court so orders, recoverable as if payable under an order of that court, and in respect of which the county court has so ordered.
(3)The payment of interest due under subsection (1) shall be enforceable as a sum payable under the judgment or order.
(4)The power conferred by subsection (1) includes power—
(a)to specify the descriptions of judgment or order in respect of which interest shall be payable;
(b)to provide that interest shall be payable only on sums exceeding a specified amount;
(c)to make provision for the manner in which and the periods by reference to which the interest is to be calculated and paid;
(d)to provide that any enactment shall or shall not apply in relation to interest payable under subsection (1) or shall apply to it with such modifications as may be specified in the order; and
(e)to make such incidental or supplementary provisions as the Lord Chancellor considers appropriate.
(5)Without prejudice to the generality of subsection (4), an order under subsection (1) may provide that the rate of interest shall be the rate specified in section 17 of the M1Judgments Act 1838 as that enactment has effect from time to time.
[ F1(5A)The power conferred by subsection (1) includes power to make provision enabling a county court to order that the rate of interest applicable to a sum expressed in a currency other than sterling shall be such rate as the court thinks fit (instead of the rate otherwise applicable).]
(6)The power to make an order under subsection (1) shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
My thought is that is about the courts power to deny or grant interest.
In putting the ''together with any further interest becoming due...'' line in judgements they are allowing the creditor to claim interest as specified in the original agreements.
Any thoughts ?
Many credit agreements include a clause to allow for interest to continue to be charged post judgement, and after default.
Judgements are often handed down with ' ''together with any further interest becoming due...'' specified.
This allows companies with CCJs and charging orders against you to keep adding interest as allowed for in their original agreements.
so how to get interest stopped at the point of judgement ?
whats the legalities surrounding this ?
and so on.
this is from Director General Fair Trading v First National
12. In agreement with the judge and the Court of Appeal, I do not accept the bank's submission on this issue. The regulations, as Professor Sir Guenter Treitel QC has aptly observed (The Law of Contract, 10th ed, 1999, p 248) "are not intended to operate as a mechanism of quality or price control" and regulation 3(2) is of "crucial importance in recognising the parties' freedom of contract with respect to the essential features of their bargain" (ibid, at p 249). But there is an important "distinction between the term or terms which express the substance of the bargain and 'incidental' (if important) terms which surround them" (Chitty on Contracts, 28th ed, 1999, "Unfair Terms in Consumer Contracts", p 747, para 15-025). The object of the regulations and the directive is to protect consumers against the inclusion of unfair and prejudicial terms in standard-form contracts into which they enter, and that object would plainly be frustrated if regulation 3(2)(b) were so broadly interpreted as to cover any terms other than those falling squarely within it. In my opinion the term, as part of a provision prescribing the consequences of default, plainly does not fall within it. It does not concern the adequacy of the interest earned by the bank as its remuneration but is designed to ensure that the bank's entitlement to interest does not come to an end on the entry of judgment. I do not think the bank's argument on merger advances its case. It appears that some judges in the past have been readier than I would be to infer that a borrower's covenant to pay interest was not intended to extend beyond the entry of judgment. But even if a borrower's obligation were ordinarily understood to extend beyond judgment even in the absence of an independent covenant, it would not alter my view of the term as an ancillary provision and not one concerned with the adequacy of the bank's remuneration as against the services supplied. It is therefore necessary to address the second question.
Theres also references in the county courts act...
s69 is about courts powers
69 Power to award interest on debts and damages
(1)Subject to [F1rules of court], in proceedings (whenever instituted) before a county court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and—
(a)in the case of any sum paid before judgment, the date of the payment; and
(b)in the case of the sum for which judgment is given, the date of the judgment.
(2)In relation to a judgment given for damages for personal injuries or death which exceed £200 subsection (1) shall have effect—
(a)with the substitution of “shall be included” for “may be included”; and
(b)with the addition of “unless the court is satisfied that there are special reasons to the contrary” after “given”, where first occurring.
(3)Subject to [F1rules of court], where—
(a)there are proceedings (whenever instituted) before a county court for the recovery of a debt; and
(b)the defendant pays the whole debt to the plaintiff (otherwise than in pursuance of a judgment in the proceedings),
the defendant shall be liable to pay the plaintiff simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt for all or any part of the period between the date when the cause of action arose and the date of the payment.
(4)Interest in respect of a debt shall not be awarded under this section for a period during which, for whatever reason, interest on the debt already runs.
(5)Interest under this section may be calculated at different rates in respect of different periods.
(6)In this section “plaintiff” means the person seeking the debt or damages and “defendant” means the person from whom the plaintiff seeks the debt or damages and “personal injuries” includes any disease and any impairment of a person’s physical or mental condition.
(7)Nothing in this section affects the damages recoverable for the dishonour of a bill of exchange.
[F2(8)In determining whether the amount of any debt or damages exceeds that prescribed by or under any enactment, no account shall be taken of any interest payable by virtue of this section except where express provision to the contrary is made by or under that or any other enactment.]
(1)Subject to [F1rules of court], in proceedings (whenever instituted) before a county court for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and—
(a)in the case of any sum paid before judgment, the date of the payment; and
(b)in the case of the sum for which judgment is given, the date of the judgment.
(2)In relation to a judgment given for damages for personal injuries or death which exceed £200 subsection (1) shall have effect—
(a)with the substitution of “shall be included” for “may be included”; and
(b)with the addition of “unless the court is satisfied that there are special reasons to the contrary” after “given”, where first occurring.
(3)Subject to [F1rules of court], where—
(a)there are proceedings (whenever instituted) before a county court for the recovery of a debt; and
(b)the defendant pays the whole debt to the plaintiff (otherwise than in pursuance of a judgment in the proceedings),
the defendant shall be liable to pay the plaintiff simple interest, at such rate as the court thinks fit or as may be prescribed, on all or any part of the debt for all or any part of the period between the date when the cause of action arose and the date of the payment.
(4)Interest in respect of a debt shall not be awarded under this section for a period during which, for whatever reason, interest on the debt already runs.
(5)Interest under this section may be calculated at different rates in respect of different periods.
(6)In this section “plaintiff” means the person seeking the debt or damages and “defendant” means the person from whom the plaintiff seeks the debt or damages and “personal injuries” includes any disease and any impairment of a person’s physical or mental condition.
(7)Nothing in this section affects the damages recoverable for the dishonour of a bill of exchange.
[F2(8)In determining whether the amount of any debt or damages exceeds that prescribed by or under any enactment, no account shall be taken of any interest payable by virtue of this section except where express provision to the contrary is made by or under that or any other enactment.]
and section 74
74 Interest on judgment debts etc
(1)The Lord Chancellor may by order made with the concurrence of the Treasury provide that any sums to which this subsection applies shall carry interest at such rate and between such times as may be prescribed by the order.
(2)The sums to which subsection (1) applies are—
(a)sums payable under judgments or orders given or made in a county court, including sums payable by instalments; and
(b)sums which by virtue of any enactment are, if the county court so orders, recoverable as if payable under an order of that court, and in respect of which the county court has so ordered.
(3)The payment of interest due under subsection (1) shall be enforceable as a sum payable under the judgment or order.
(4)The power conferred by subsection (1) includes power—
(a)to specify the descriptions of judgment or order in respect of which interest shall be payable;
(b)to provide that interest shall be payable only on sums exceeding a specified amount;
(c)to make provision for the manner in which and the periods by reference to which the interest is to be calculated and paid;
(d)to provide that any enactment shall or shall not apply in relation to interest payable under subsection (1) or shall apply to it with such modifications as may be specified in the order; and
(e)to make such incidental or supplementary provisions as the Lord Chancellor considers appropriate.
(5)Without prejudice to the generality of subsection (4), an order under subsection (1) may provide that the rate of interest shall be the rate specified in section 17 of the M1Judgments Act 1838 as that enactment has effect from time to time.
[ F1(5A)The power conferred by subsection (1) includes power to make provision enabling a county court to order that the rate of interest applicable to a sum expressed in a currency other than sterling shall be such rate as the court thinks fit (instead of the rate otherwise applicable).]
(6)The power to make an order under subsection (1) shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
In putting the ''together with any further interest becoming due...'' line in judgements they are allowing the creditor to claim interest as specified in the original agreements.
Any thoughts ?
)
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