Effect of delay in commencing action on period during which interest accrues

In Claymore Services Limited v Nautilus Properties Limited [2007] EWHC 805 (TCC), the claimant was seeking payment of a sum of money for work done on a property owned by the defendant. Shortly before the trial, the parties agreed to a full and final settlement of all claims and counterclaims except for the claimant's claim for interest. The court had to consider the relevant period during which interest accrued, and the appropriate rate of interest.

On the period during which interest accrued and the question of the effect of the delay before Claymore commenced these proceedings, the judge found that there had been one year's unreasonable delay and concluded that the interest payable to Claymore should be reduced by 50% during this period. The judge found that the appropriate rate of interest was 2% above base rate.

This case is interesting because the judge reviews the authorities on the effect of delay in commencing proceedings on the period during which interest should accrue, and draws three principles from them. These principles are relatively advantageous to commercial claimants.