1. What is UK Litigation Interest?

UK litigation interest is calculated at the court rate of 8% per annum for money claims. This statutory interest is awarded on judgment debts and can be claimed on money owed from the date it was due until payment is made.

2. How Does the Calculator Work?

The calculator uses the standard UK litigation interest formula:

Where:

• \( Amount \) — Principal amount in pounds (£)
• \( 8\% \) — Standard UK court rate
• \( Days \) — Number of days interest is being calculated for
• \( 365 \) — Days in a year (not accounting for leap years)

Explanation: The formula calculates simple interest at 8% per annum for the specified number of days.

3. Importance of Accurate Interest Calculation

Details: Accurate interest calculation is crucial for legal claims to ensure proper compensation for late payments and to comply with court requirements for money judgments.

4. Using the Calculator

Tips: Enter the principal amount in pounds and the number of days interest is being calculated for. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is the court rate always 8%?
A: While 8% is the standard rate under the Judgments Act 1838, courts may award different rates in specific circumstances.

Q2: How are partial days handled?
A: Interest is typically calculated to the day before payment is made or judgment is entered.

Q3: Does this account for compound interest?
A: No, this calculates simple interest. Courts rarely award compound interest unless specifically agreed between parties.

Q4: When does interest start accruing?
A: Typically from the date the debt was due or the cause of action arose, unless otherwise specified.

Q5: Are there exceptions to this calculation?
A: Yes, certain types of debts (like commercial debts) may have different interest rules under the Late Payment of Commercial Debts Act.