In Adcock & Ors v Blemain Finance Ltd [2022] EWHC 3280 (SCCO) Costs Judge Whalan considered, and rejected,  the claimants’ arguments that they should have pre-judgment interest on costs.


“It is clear nonetheless that the incipitur rule constitutes the default position and that pre-judgment interest should only be awarded where justice requires a departure from this general rule.”



The claimants had brought actions against the defendants in relation to loan agreements.  There are some 600 similar cases pending for assessment.


    1. The substantive claims concern actions brought by various Claimants against the same Defendant on the grounds that loan arrangements entered between them were unfair within the meaning of the Consumer Credit Act 1974. The Claimants cite specifically payments made by the Defendant as “secret commissions” to brokers who arranged the loans. In every case, the Claimants had fallen into difficulty in servicing the loans advanced. The three claims were each successful, securing settlement in the sums of £30,000 (Adcock), £10,000 (Lynch) and £6,500 (Pollard).
  1. The Claimants assert that they were unable to privately fund disbursements in their litigation, so they took out loans in order to fund those costs. These ‘funding loans’ were non-recourse loans secured against the proceeds of the claims, so they did not trigger periodical payments as the cases progressed. The interest rate(s) payable under the loans is 30.3% per annum. The Claimants now seek to recover the interest they have incurred on those loans by an award of pre-judgment interest.



The judge did not accept the claimants’ arguments.

    1. I am not satisfied that in these cases the Claimants should be entitled to recover pre-judgment interest incurred pursuant to funding loans. Undoubtedly the court has discretion to award pre-judgment interest, by virtue of the provisions of CPR 40.8 and 44.2(6)(g). Insofar as CJ Brown in Nosworthy may have purported to invoke a requirement of ‘exceptionality’ – and I do not actually think he did so – I agree with Mr Latham that this would represent an incorrect application or fetter on the exercise of the discretion. It is clear nonetheless that the incipitur rule constitutes the default position and that pre-judgment interest should only be awarded where justice requires a departure from this general rule. Generally, as has been acknowledged repeatedly in the cases cited above, it is important to avoid awarding interest from different dates and/or on different items or components of a costs assessment. And whether the discretion to be exercised is a “weak” as opposed to a “strong” one, as Mr Hogan submits, it is clear that it should be exercised on a “broad brush” basis. It is clear to me, on the facts of these cases, that justice does not require a departure from the general rule. Although I am dealing effectively with a large number of cases against a common Defendant and citing an identical cause of action under the Consumer Credit Act, it is not large commercial litigation or, indeed, a multiparty action. Notwithstanding these common points of principle, each case will produce a bill that will require separate, individual assessment by a Costs Officer, in circumstances where both the judgment sums and the costs claimed per case are necessarily modest. Recognising the prejudice identified by Dingemans J in Schumann, and elsewhere, namely the undesirability of importing “unnecessary levels of sophistication” into assessments, the balance of advantage on this issue undoubtedly favours the Defendant, and by a clear margin. It is not desirable for the assessment process to invoke a separate, bespoke calculation as to the interest that has accrued. Quite apart from the additional work and complexity involved, raising potentially, on a case-by-case basis, contentious issues of evidence and/or disputed issues of calculation, and leading almost inevitably to more prolonged argument to dispute on assessment, it is clear to me that there is a significant risk that the costs of assessment would rapidly become disproportionate. I am not attracted to Mr Latham’s submission that this prejudice could be properly mitigated, either wholly or in part, by the application of some common period of claim applicable to each individual case. Not only would this impose a somewhat arbitrary norm, it would still require an individual case-by-case calculation, and an irreducible risk of dispute and contention, in circumstances where the interest upon that item would be different necessarily to the interest calculations in respect of the assessment as a whole. No costs assessment provides a complete indemnity to the receiving party, but I am satisfied that the application of the general rule and, in turn, a rejection of the claimants’ claim for pre-judgment interest, constitutes a just outcome for the Claimants in these cases.
  1. As such, it is not necessary for me to either engage with or determine specifically any of the other evidential issues cited by the advocates. I do not, in other words, determine any disputes as to the Claimants’ need for a funding loan, whether the interest rate claimed is reasonable or otherwise, or whether the accounts proffered in Adcock, Lynch and Pollard rely on calculations which are correct or otherwise. Given, in other words, my determination of the general principle, it is unnecessary for me to consider or determine specifically any matters set out in the Skeleton Arguments of Mr Latham (para. 24-26) or Mr Hogan (paras. 20-31).