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Debt Problems | Bankruptcy

Interest on Judgment Debts-What You Need to Know

Are you concerned about interest accumulating on a judgment against you?

Or are you a creditor seeking to recover a reasonable amount of interest on money rightfully due and owing to you?

When a debtor obtains a judgment against a creditor he may also be entitled to interest on the judgment amount pursuant to section 22 of the Courts Act, 1981. This interest order is at the discretion of the Judge concerned.

Interest begins to run on the judgment amount (not costs) from the day the judgment is granted.

The discretion of the Court to award interest or not was raised in Reaney v Interlink Ireland Ltd [2016] IECA 238. Judge Finlay Geoghegan, in this Court of Appeal case, described the rationale behind Courts Act interest as follows:

“To put it another way: it is intended to compensate a person for being out of the money awarded from the time he ought to have received it to the date of judgment, provided, however, other facts make it just between the parties to make such an award.”

This Reaney v Interlink Ireland Ltd case is a good one to review to see what the considerations of a Court will be in deciding whether to award interest or not.

The rate of interest was set at 8% per annum from 1989 pursuant to section 26 of the Debtors (Ireland) act, 1840. This rate was reduced from 8% to 2% per annum in the Courts Act 1981 (Interest on Judgment Debts) Order 2016 (SI 624/2016) with effect from 1st January, 2017.

You can read the full decision in the Court of Appeal in Reaney & ors -v- Interlink Ireland Limited (t/a D.P.D.) [2016] IECA 238.