Personal injury interest calculation

Rodney Nelson-Jones on calculating interest for personal injury claims

In personal injury cases, the standard rate of interest on general damages for pain and suffering and loss of amenities was fixed at 2% per annum by the House of Lords in Birkett v Hayes [1982] 1 WLR 816; [1982] 2 All ER 70.

This has been confirmed as appropriate by the Court of Appeal in Lawrence v Chief Constable of Staffordshire [2000] The Times, 25 July.

The appropriate rate of interest for special damages is the rate, over the period for which the interest is awarded, which is payable on the court special account.

This rate was reduced to 6% per annum on 1 February 2002.

Interest since June 1987 has been paid daily on a 1/365th basis, even in a leap year.

In cases of continuing special damages, half the appropriate rate from the date of injury to the date of trial is awarded.

In cases where the special damages have ceased and are thus limited to a finite period, there are conflicting Court of Appeal decisions as to whether the award should be half the appropriate rate from injury to trial (Dexter v Courtaulds [1984] 1 All ER 70) or the full special account rate from a date within the period to which the special damages are limited (Prokop v DHSS [1985] CLY 1037).

The House of Lords has confirmed that DSS benefit should be disregarded when calculating interest on special damages (Wadey v Surrey County Council [2000] 1 WLR 820 (HL).

The relevant rates since 1965 are in the White Book at note 7.0.15 as set out in table 3 below.

Table 1 records the total of these rates from January 1983.

In the left-hand column is the month from the first day of which interest is assumed to run.

The right-hand column shows the percentage interest accumulated from the first day of each month to 1 October 2002.

Continued use may be made of this table by adding to the figures therein 1/365th of the special account rate from 1 October 2002 onwards.

Precision may be attained through table 2 which records the accumulated total of days at the end of each of the next six months.

Rodney Nelson-Jones is a partner at City-based law firm Field Fisher Waterhouse

Table one - total rates

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992January 195.40 182.78 170.76 158.66 146.87 135.10 124.24 111.03 96.78 84.66February 194.30 181.72 169.64 157.64 145.83 134.16 123.13 109.82 95.57 83.79March 193.30 180.73 168.72 156.72 144.89 133.29 122.13 108.72 94.47 82.98April 192.20 179.67 167.70 155.70 143.85 132.35 121.03 107.51 93.26 82.11May 191.17 178.69 166.71 154.71 142.88 131.45 119.96 106.34 92.28 81.27June 190.11 177.67 165.69 153.69 141.88 130.64 118.86 105.13 91.26 80.40July 189.08 176.69 164.71 152.71 140.92 129.86 117.79 103.96 90.27 79.55August 188.02 175.67 163.69 151.69 139.92 129.06 116.69 102.75 89.25 78.68September 186.96 174.66 162.67 150.71 138.92 128.12 115.58 101.54 88.23 77.81October 185.93 173.67 161.68 149.76 137.95 127.22 114.51 100.37 87.25 76.97November 184.87 172.66 160.66 148.79 136.96 126.28 113.41 99.16 86.38 76.10December 183.84 171.67 159.68 147.84 136.03 125.28 112.24 97.99 85.53 75.26

Total rates (continued)

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002January 74.39 66.19 58.19 50.19 42.17 34.17 26.17 18.59 11.57 4.57February 73.52 65.52 57.52 49.52 41.49 33.49 25.49 18.00 10.98 3.98March 72.90 64.90 56.90 48.88 40.88 32.88 24.88 17.44 10.44 3.52April 72.22 64.22 56.22 48.20 40.20 32.20 24.20 16.85 9.85 3.01May 71.56 63.56 55.56 47.54 39.54 31.54 23.54 16.27 9.27 2.52June 70.88 62.88 54.88 46.86 38.86 30.86 22.86 15.68 8.68 2.01July 70.23 62.23 54.23 46.21 38.21 30.21 22.21 15.10 8.10 1.51August 69.55 61.55 53.55 45.53 37.53 29.53 21.53 14.51 7.51 1.00September 68.87 60.87 52.87 44.85 36.85 28.85 20.93 13.91 6.91 0.49October 68.21 60.21 52.21 44.19 36.19 28.19 20.36 13.34 6.34 November 67.53 59.53 51.53 43.51 35.51 27.51 19.76 12.74 5.74 December 66.87 58.87 50.87 42.85 34.85 26.85 19.19 12.17 5.17

Table two - accumulated total of days

31 October 2002 3130 November 2002 6131 December 2002 9231 January 2003 12328 February 2003 15131 March 2003 182

Suppose that interest runs from 1 April 1999 to 13 December 2002.

The total to the end of September 2002 is 24.2%.

If the rate remains at 6% per annum, the grand total from 1 December 1999 to 13 December 2002 will be 24.2 + 1.2 = 25.4%.These tables should assist all those concerned with interest since 1983 in making calculations fluently.

The listed rates provide the base for a calculation from 1965.

Although the tables' primary application is to interest on special damages in personal injury cases, they are equally applicable to any other case in which the special account is used in calculating interest.

Table three - rates since 1965

From 1 October 1965 5%1 September 1966 5.5%1 March 1968 6%1 March 1969 6.5%1 March 1970 7%1 April 1971 7.5%1 March 1973 8%1 March 1974 9%1 February 1977 10%1 March 1979 12.5%1 January 1980 15%1 January 1981 12.5%1 December 1981 15%1 March 1982 14%1 July 1982 13%1 April 1983 12.5%From1 April 1984 12%1 August 1986 11.5%1 January 1987 12.25%1 April 1987 11.75%1 November 1987 11.25%1 December 1987 11%1 May 1988 9.5%1 August 1988 11%1 November 1988 12.25%1 January 1989 13%1 November 1989 14.25%1 April 1991 12%1 October 1991 10.25%1 February 1993 8%1 August 1999 7 %1 February 2002 6%