Litigators will be acutely aware that an award of costs is a judgment debt and, as such, interest will run from the date of the costs order at a rate of 8%.

However, some parties remain unaware that in some circumstances they are able to recover pre-judgment interest. This is very common in detailed assessment proceedings of commercial matters where it’s often the case that private paying clients are paying out significant sums during the life of the claim.

Recovery of pre-judgment interest is the rule rather than the exception in commercial matters where privately paying parties are incurring significant sums during the life of litigation. There are several authorities for this too;

Amoco (UK) Exploration Company v British American Offshore Ltd [2001] EWHC 484 (Comm)

Bim Kemi AB v Blackburn Chemicals Ltd [2003] EWCA Civ 889,

Involnert Management Inc v Aprilgrange Limited & Ors [2015] EWHC 2834 (Comm).

The rate of interest will be a commercial rate, and in the discretion of the court, but it is usually around 1% to 3%.

Another factor that can be easily overlooked is if a solicitor intends to retain any interest that has accrued on costs, whether it is pre or post judgment, then they must ensue the retainer provides for it. Without such a clause, the interest must be returned to the client.