Recovery of interest in Scottish litigation

One of the quirks of litigation has the ability to recover interest at a rate quite often much higher than the official base rate. This is because the usual default rate is the “judicial rate”, which has been fixed for many years in both the Court of Session and Sheriff Courts at 8%.

In the recent Court of Session case of FARSTAD SUPPLY AS v ENVIROCO LIMITED reported at http://www.scotcourts.gov.uk/opinions/2011CSOH153.html the judge noted the recent wide mismatch between the judicial rate and the base rate and made an adjustment for this by only allowing 4% interest from December 2008.

In damages cases this will be a useful authority for defenders to be aware of.