Compound Interest in UK Law

Leading Cases
  • President of India v La Pintada Compania Navigacion S.A. (La Pintada)
    • House of Lords
    • 24 Mayo 1984

    Chancery courts had further regularly awarded interest, including not only simple interest but also compound interest, when they thought that justice so demanded, that is to say in cases where money had been obtained and retained by fraud, or where it had been withheld or misapplied by a trustee or anyone else in a fiduciary position.

  • Sempra Metals (formerly Metallgesellschaft Ltd) v Commissioners of Inland Revenue
    • House of Lords
    • 18 Julio 2007

    But the claimant must claim and prove his actual interest losses if he wishes to recover compound interest, as is the case where the claim is for a sum which includes interest charges. In practice, especially where the period over which interest is sought is short or where the claimant does not have to borrow money to replace the debt, simple interest under section 35A of the Supreme Court Act 1981 is likely to be the more convenient remedy.

    In the nature of things the proof required to establish a claimed interest loss will depend upon the nature of the loss and the circumstances of the case. Or the loss may be loss of an opportunity to invest the promised money. Here again, where the circumstances require, the investment loss may need to include a compound element if it is to be a fair measure of what the plaintiff lost by the late payment. Or the loss flowing from the late payment may take some other form.

  • Littlewoods Retail Ltd and Others v The Commissioners for HM Revenue & Customs
    • Chancery Division
    • 28 Marzo 2014

    I confirm that I remain of the same opinion, and I would therefore answer the comparable question in the present case in Littlewoods' favour. The Revenue did not, of course, concede the point before me, but recognised that it would be more sensible to reserve it for a higher court since I had so recently considered it myself and decided it against them.

  • F J Chalke Ltd and Another v The Commisioners for HM Revenue and Customs
    • Court of Appeal (Civil Division)
    • 25 Marzo 2010

    It is also striking, as the Commissioners have forcefully submitted, that there is no clear statement by the ECJ, whether in FII or any subsequent case, that the former settled jurisprudence has been changed by the formulation of the San Giorgio principle in paragraph 205 of the ECJ's judgment in FII, and that, in cases of overpayment as much as cases of premature payment, the San Giorgio principle requires the recipient to pay compensation for the time value of the wrongful retention of tax when it was not lawfully due.

  • Prudential Assurance Company Ltd v Revenue and Customs Commissioners
    • Supreme Court
    • 25 Julio 2018

    For the foregoing reasons, we therefore depart from the reasoning in Sempra Metals so far as it concerns the award of interest in the exercise of the court's jurisdiction to reverse unjust enrichment. As mentioned earlier, it is unnecessary for us to consider the reasoning in that case so far as it concerns the award of interest as damages, and nothing in this judgment is intended to question that aspect of the decision.

  • F J Chalke Ltd and Another v The Commisioners for HM Revenue and Customs
    • Chancery Division
    • 08 Mayo 2009

    Certain important consequences seem to me to follow from this analysis. In the first place, if an effective remedy requires that the member state should not profit from the unlawful charge, the claimant should in principle be entitled not only to repayment of the tax itself but also to interest. Otherwise the claimant would effectively be compelled to make an interest free loan to the member state for the period between the wrongful exaction of the tax and its repayment.

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Legislation
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Books & Journal Articles
  • Recovery of Compound Interest as Restitution or Damages
    • Núm. 71-2, Marzo 2008
    • The Modern Law Review
  • Liberal Nationalism: An Irresponsible Compound?
    • Núm. 45-2, Junio 1997
    • Political Studies
    In this century there has been a deep concern about the dangers of nationalism. Many of those who have expressed such concerns have been liberals. Yet, ironically, in the last decade, there has bee...
    ......in the last decade, there has been a resurgence of interest in the idea of nationalism . from within liberal thought ± thus giving rise to the compound term `liberal . ......
  • Swaps Litigation: Westdeutsche Landesbank Girozentrale v Islington LBC
    • Núm. 4-3, Enero 1997
    • Journal of Financial Crime
    • 250-252
    An interest rate swap is an agreement between two parties by which one party (‘the fixed rate payer’) agrees to pay the other (‘the floating rate payer’) interest on a notional principal sum at a f...
    ...... Landesbank Girozentrale v Islington LBC Karen Houston An interest rate swap is an agreement between two parties by which one party ('the ... the net balance outstanding on the transaction together with compound interest calculated at six-monthly rests from 1st April, 1990. The Court ......
  • Local Linear Impulse Responses for a Small Open Economy*
    • Núm. 74-3, Junio 2012
    • Oxford Bulletin of Economics and Statistics
    Traditional vector autoregressions derive impulse responses using iterative techniques that may compound specification errors. Local projection techniques are more robust to this problem, and Monte...
    ...... derive impulse responses using iterative techniques that may compound speci fi cation errors. Local projection techniques are more robust to ... model, and focus on effects of policy on gross domestic product, interest rates, prices and exchange rates. I. Introduction Impulse response ......
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Law Firm Commentaries
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