Kitcatt & Ors v MMS UK Holdings Ltd & Anor

Pre-judgment interest is discretionary. The usual Commercial Court rate of 1% above base rate is a presumption, not an inflexible rule. It may be displaced where the circumstances justify a different rate, including where individual claimants are unlikely to borrow at commercial rates. In the absence of specific evidence, an award of 2% above base rate may be appropriate. The date from which interest runs should reflect when payment would probably have been made if both parties had acted sensibly and reasonably. The successful party remains entitled to its costs in principle, but costs may be reduced to reflect unreasonable litigation conduct, abandoned claims and late changes of case.

The judgment determined consequential matters following the court’s earlier judgment, [2017] EWHC 675 (Comm), which awarded the claimants £2.6 million against MMS and dismissed the claim against Publicis. The issues were the rate and commencement date for pre-judgment interest, the period for payment of the judgment sum, liability and proportion for costs, interest on costs, payment on account, and permission to appeal on the SSC issue.

1. Pre-judgment interest. The usual Commercial Court rate of 1% above base rate was only a presumption. The claimants were individuals rather than a commercial entity, and it was reasonable to infer that commercial borrowing rates were unavailable to them. Taking account of their financial position and the absence of specific evidence, the appropriate rate was 2% above base rate. The approach in Lindsay v O’Loughnane [2010] EWHC 529 (QB) was followed.
2. The court rejected the proposed date of 14 February 2014. The award of statutory interest was discretionary, so the minimum lawful performance principle referred to in Durham Tees Valley Airport Ltd v Bmibaby Ltd [2010] EWCA Civ 485 did not apply. Interest was to run from 1 May 2014, being the court’s assessment of when the deferred consideration would probably have been paid if both parties had acted sensibly and reasonably.
3. The judgment sum was payable within the usual 14 days. No extension to 28 days was justified, and interest under the Judgments Act rate would accrue thereafter if payment was delayed.
4. The claimants were the successful party against MMS and were entitled in principle to their costs. However, their reliance on an abandoned £9 million case, late pleading of the December 2012 agreement, changing case and conduct of the litigation justified a reduction. They were awarded 75% of their costs against MMS. No costs order was made in favour of Publicis because its joinder added little or nothing to the costs.
5. Interest on costs was awarded at 2% above base rate from the date the claimants actually paid the relevant solicitors’ invoices. MMS was ordered to pay £440,000 plus VAT on account of costs. Permission to appeal on the SSC issue was refused because the answer was clear and an appeal had no real prospect of success.

This was a first-instance judgment on consequential matters following the court’s earlier judgment in the same proceedings, [2017] EWHC 675 (Comm).