Jurisdiction(s):
United Kingdom

Interest on costs: 'due' means 'payable'—Limitation Act 1980 s24(2) runs from enforceability, not accrual (Court of Appeal, England and Wales)

Published on: 02 May 2024

Published by a LexisNexis Dispute Resolution expert

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Article summary

Deutsche Bank Ag v Sebastian Holdings Inc [2024] EWCA Civ 245 What are the practical implications of this case?

The Court of Appeal overturned the first‑instance determination, which had decided that interest on costs becomes ‘due’ at the point it accrues, thereby imposing a six‑year limitation period running from the date of the relevant authority for costs. In practical terms, that approach would have created an unworkable constraint on the recovery of interest on costs, because it would, in effect, deprive the receiving party of any entitlement to interest wherever the authority in question was more than six years old. The consequences would be most acute in long‑running litigation in which interlocutory costs orders are made along the way, and in matters where detailed assessment proceedings are drawn out over time. It would, moreover, hand the paying party a powerful tactical incentive to try to postpone any detailed assessment proceedings so that they drift beyond that six‑year threshold, with the result that interest would be lost not through merit but through delay...

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