Compound Interest and Financing Claims: The 'Sempra Metals' Revolution

Judge Anthony Thornton QC

October 2008

A paper based on a talk given to the Society of Construction Law in London on 5th February 2008.

When in English law can a money claim also include a claim for compound interest for the delay in payment or for the financing costs of actions for which another party is legally responsible? Judge Thornton's paper discusses the general implications of the House of Lords' decision in the Sempra Metals case from 2007, which overturns well-established case law to open the door to claims for compound interest in a range of new categories of case. Although the case itself was in part a restitutionary claim, Judge Thornton goes on to explain its dramatic implications for many types of construction claim ('a contractual El Dorado'); he also reminds readers of the existing statutory provisions permitting (sometimes even requiring) the addition of interest to claims, including the under-used Late Payment of Commercial Debts (Interest) Act 1998.

Introduction - Sempra Metals explained - Damages for late payment of debt - Restitutionary claims - Construction claims: introduction - Sempra Metals: its effect on construction claims - Conclusions.

The author: Judge Anthony Thornton QC is a judge of the Technology and Construction Court in London.

Text: 19 pages.
PDF file size: 178k