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The County Courts Act 1984 contains a section that might surprise many debtors. Section 69 clearly states that a claimant has the right to request the debtor to pay interest on the unpaid amount. But there’s more to this than meets the eye.

Curious about the depth of this provision? Hold on, we’re about to dive deep…

Sanjay Patel
Last updated on 4 October 2023
Fact Checked

Table of Contents

1. What is the County Courts Act 1984?
2. What is the Commercial Debts Interest Act 1998?
3. How Do I Calculate Statutory Interest at 8% per Year?
4. Why You Should Aim to Avoid Legal Action
5. How to Avoid Debt Court Action
6. More Assistance with Late Payment of Commercial Debts
7. Key Points


If you find yourself in a situation where you are being taken to court due to delayed payments for services or unresolved personal debts, the party bringing the legal action may seek additional compensation in the form of interest on the debt.

This particular legal provision is rooted in Section 69 of the UK County Courts Act, or it might pertain to a distinct Act designed for pursuing damages in commercial disputes.

What is the County Courts Act 1984?

The County Courts Act 1984 is an act that helps to regulate the method in which county court proceedings are conducted in the UK, including debt-related matters. It was originally devised in 1984. But it has been amended and updated over the years. This act doesn’t just cover debt-related issues. It also covers a variety of other topics.

So, the County Courts Act 1984 isn’t merely a set of words on paper. It’s the UK’s protective shield, standing tall for both debtors and creditors. Serving as the bedrock of the country’s financial justice system, it ensures that every penny owed finds its rightful owner.

The Star Player: Section 69

Section 69 of the County Courts Act 1984 states that a claimant has the right to request a debtor to pay interest on the money they were unable to repay.

This indicates that when a debtor is requested to repay the money they owe by a judge, the court can make another judgment asking to pay interest on the debt if the claimant requests. For anyone claiming damages against a company for breaking the terms of a contract, there’s something similar.

Why Does County Courts Act 1984 Matter to You?

If you are involved in a monetary transaction such as debts, credits, or financial dealings, it’s important that you know about this act from 1984. This act is your silent guardian. Whether it’s ensuring you get the money owed to you or it’s about understanding your liabilities, the County Courts Act 1984 plays a pivotal role.

Important things to know about County Courts Act 1984
  • The County Courts Act 1984 stands as the UK’s financial justice system’s pillar.
  • It has evolved, adapting to the changing financial landscapes.
  • Section 69 allows claimants to seek interest on overdue personal debts.
  • It’s not just a historical relic; it’s highly relevant even today, especially if finances matter to you.

What is the Commercial Debts Interest Act 1998?

According to the Commercial Debts Interest Act 1998, which is also called the Late Payment of Commercial Debts (Interest) Act 1998, the plaintiff has the right to claim a statutory rate of interest at 8% per annum.

Businesses, unlike friendships, revolve around profits. So when a company owes another money, the waiting game can be costly. That’s where this act spins the narrative. It empowers businesses to claim a staggering 8% interest per annum on delayed payments. This interest isn’t just handed out like free samples. It has to be actively claimed.

A claimant can add this interest to commercial debts in a situation where one company claims against another company for breaking the terms of a contract (leading to debt or damages) or for contractual damages.

As mentioned before, since there is no automatic right to the interest payment, one must also claim the interest payment of commercial debts. If there is no claim, then there will be no 8% interest.

Is statutory interest simple or compound?

Under the 1988 Act, the base interest is simply interest rather than compound interest. The distinction between simple and compound interest lies in the method of calculation:

1. Simple interest is computed based solely on the initial (principal) amount,
2. Compound interest takes into account both the principal amount and the accrued interest.

How Do I Calculate Statutory Interest at 8% per Year?

If you want to calculate the interest amount your credit may ask you to pay, you can work out the statutory interest of your debt. But note that it is not as easy as just working out 8% of the debt you owe.

Decoding the 8% Enigma

In order to calculate the 8% interest, follow the below method:

1. Multiply your owed amount (debt) by 0.08.
2. Divide your result by 365. This small figure is the daily interest rate.
3. Now, multiply the daily rate by the number of days the debt has stood its ground.

Imagine a debt of £1000 that’s been looming for 100 days. In this case, this is how you calculate the claim:

  • £1000 (the amount you owe) x 0.08 = £80 (That’s the interest for an entire year)
  • £80 ÷ 365 = £0.0.21 (This tiny amount is the daily interest)
  • Therefore, the 8% interest = £0.21 x 100 (number of due days) = £21. That’s the additional weight of the debt.

So, in this case, the 8% statutory interest rate would be £21. This is the amount the claimant receives in interest and the amount that the debtor should pay.

Why You Should Aim to Avoid Legal Action

If you owe money on a credit card or a loan, try to avoid legal proceedings. Making a late payment is not the end of the road; you still have other options you can take to avoid going to court or the risks of legal proceedings.

Court proceedings can lead to unexpected expenses like having to pay the claimant’s legal charges.

Picture bailiffs at your doorstep, an aftermath of court action. Their visit isn’t just daunting. it’s costly. You might have to pay creditor’s solicitors’ fees associated with the trial, as well as additional fees linked to debt recovery and enforcement actions.

For example, after going to court, bailiffs might come to your house. If they do come to your home, you will have to pay a minimum of £310 along with your unpaid debt. This bailiff fee consists of £75 for the Notice of Enforcement and £235 for visiting.

You will also have to face long-term financial implications for unpaid debts and legal actions. This includes a negative impact on your credit score. So, the best option is to avoid them taking legal action.

How to Avoid Debt Court Action

When facing the towering mountains of debt, a proactive approach is your trusty grappling hook. Here’s your roadmap to safer terrain:

1. Open Dialogue

Begin with a simple conversation with your creditors. More often than not, there’s a middle ground waiting to be discovered.

2. Craft a Strategy

A payment plan that suits both parties can be the silver lining. After all, gradual repayment is better than none. Many creditors decide to reduce the amount that you should pay. But they might increase the rate of interest so that you will pay off the debt faster.

Even though this does not sound like the perfect solution, the monthly amount that you should pay will be affordable. So it will prevent you from facing further financial struggles.

Before agreeing to a repayment plan, calculate an accurate budget. This will help you to find out the amount you can afford to pay each month. If you don’t do this, you might struggle with the payments, which may worsen your situation.

3. Free Debt Solutions

There are many debt charities ready to extend a helping hand with tailor-made debt solutions. This includes Debt Relief Orders (DRO) or Debt Management Plans (DMP). There are many charities that act on behalf of debtors to help make the debt recovery process less stressful. So feel free to reach out to one.

4. Expert Intervention

Even though debt charities are helpful, they cannot provide formal debt solutions such as Individual Voluntary Arrangements (IVA). So, if you want an IVA or other complex debt solutions, reach out to a debt management business or an Insolvency Practitioner.

Alternatively, contact a qualified and licensed debt advisor or feel free to fill out our online form and get in touch with our Money Advisor team member to get help.

More Assistance with Late Payment of Commercial Debts

If you’re about to face legal action, there are many avenues for advice, especially from registered charities. A quick online search can open doors to helpful debt charities that are ready to guide you through commercial debts. Some debt charities you can reach out to include:

  • StepChange
  • National Debtline
  • Citizens Advice

Key Points

  • The County Courts Act 1984 is a foundational legislation in the UK that deals primarily with debt-related issues. The heart of this Act, Section 69, empowers claimants to seek interest on delayed personal debts during court proceedings.
  • Specifically, Section 69 of the County Courts Act 1984 allows claimants the right to request interest on unpaid personal debts in the court.
  • A significant number of UK residents have the legal right to write off some portions of their debt, courtesy of provisions like those in the County Courts Act 1984.
  • For disputes arising out of business transactions, the Commercial Debts Interest Act 1998 kicks in. Under this act, businesses can claim a statutory interest at a rate of 8% per annum.
  • To calculate this statutory interest, one needs to multiply the debt amount by 0.08, divide this figure by 365 (days in a year), and then multiply by the number of days the debt has remained unpaid.
  • To avoid the complexities and potential repercussions of legal action, it’s vital to actively communicate with creditors. Negotiating a feasible payment plan is a practical approach. Alternatively, one can also explore free debt solutions offered by various charitable organisations.
  • In situations where you feel overwhelmed, it’s advisable to seek guidance from registered charities. Numerous online resources can also provide deeper insights and advice, especially concerning late payments of commercial debts, aligning with the stipulations of the County Courts Act 1984.

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