The standard rate of interest on general damages for pain and suffering and loss of amenities in personal injury cases was fixed at 2% a year by the House of Lords in Birkett v Hayes [1982] 1 WLR 816; [1982] 2 All ER 70. This was confirmed as appropriate by the Court of Appeal in Lawrence v Chief Constable of Staffordshire [2000], The Times, 25 July.

The appropriate rate of interest for special damages is the rate, over the period for which the interest is awarded, which is payable on the court special account (the Special Account Rate or SAR). After seven years at 6% this rate was reduced to 3% a year on 1 February 2009, to 1.5% on 1 June 2009, and to 0.5% on 1 July 2009 where it has remained ever since. With the UK economy seemingly at risk of a triple-dip recession, it appears unlikely that the SAR will rise again before January 2014. Interest since June 1987 has been paid daily on a 1/365th basis, even in a leap year such as 2012.

In cases of continuing special damages, half the appropriate rate from the date of injury to the date of trial is awarded. In cases where special damages have ceased and are thus limited to a finite period, there are conflicting appeal court decisions as to whether the award should be half the appropriate rate from injury to trial (Dexter v Courtaulds [1984] 1 All ER 70), or the full special account rate from a date within the period to which the special damages are limited (Prokop v DHSS [1985] CLY 1037). Simple mathematics suggests interest should run at half SAR while the loss is continuing, and at full SAR thereafter. The House of Lords has confirmed that Department for Work and Pensions benefit should be disregarded when calculating interest on special damages (Wadey v Surrey County Council [2000] 1 WLR 820 (HL)).

Table 1 records the percentage total of SAR up to 1 January 2013 for each month since January 1992. In the left-hand column is shown the month from the first day of which interest is assumed to run. The right-hand column shows the percentage interest accumulated from the first day of each month to 1 January 2013.

Continued use can be made of this table by adding 1/365th of the annual SAR for each day beyond 1 January 2013 over which the interest is to be calculated. Table 2 records the accumulated number of days to the first day of each month as well as the additional interest to be added for that same period (on the basis that SAR remains at 0.5% throughout).

Interest for one full calendar month is currently 0.04%. The contribution to interest arising from part only of one month can be calculated to an acceptable level of accuracy by multiplying that figure by the number of the day in the month up to which interest is to be calculated and then dividing by 30.

Suppose that interest runs from 1 June 2011 to an estimated trial date on 17 June 2013. The interest to 1 January 2013 is 0.79% (table 1). The interest from 1 January 2013 to 1 June 2013 is 0.21% (table 2). The interest from 1 June 2013 to 17 June 2013 is 0.04% x 17/30 = 0.02%. The total interest from 1 June 2011 to 17 June 2013 is therefore 0.79% + 0.21% + 0.02% = 1.02%.

These tables should assist all those concerned with interest since 1992 to make calculations fluently. Although the tables’ primary application is to interest on special damages in personal injury cases, they are equally applicable to any other cases in which the special account is used in calculating interest. The tables are of particular use in long-running cases such as professional negligence cases, when historically high interest rates might have a significant impact on the value of the claim. The relevant rates since 1965 are conveniently set out in the White Book at note 709 and are reproduced in table 3 for completeness.

Andrew Morgan is a partner in the asbestos claims department at Field Fisher Waterhouse

Table 1 - rates of interest on ­special account since January 1992 (%) clear="all">

1992 1993 1994 1995 1996 1997 1998
January 125.58 115.30 107.11 99.11 99.11 83.09 75.09
February 124.71 114.13 106.43 98.43 90.43 82.41 74.41
March 123.90 113.82 105.82 97.82 89.80 81.80 73.80
April 123.03 113.14 105.14 97.14 89.12 81.12 73.12
May 122.18 112.48 104.48 96.48 88.46 80.46 72.46
June 121.31 111.80 103.80 95.80 87.78 79.78 71.78
July 120.47 111.15 103.15 95.15 87.12 79.12 71.12
August 119.60 110.47 102.47 94.47 86.44 78.44 70.44
September 118.73 109.79 101.79 93.79 85.76 77.76 69.76
October 117.89 109.13 101.13 93.13 85.11 77.11 69.11
November 117.02 108.45 100.45 92.45 84.43 76.43 68.43
December 116.17 107.79 99.79 91.79 83.77 75.77 67.77

1999 2000 2001 2002 2003 2004 2005
January 67.09 59.51 52.49 45.49 39.41 33.41 27.39
February 66.41 58.92 51.90 44.90 38.90 32.90 26.88
March 65.80 58.36 51.36 44.44 38.44 32.42 26.42
April 65.12 57.76 50.76 43.93 37.93 31.91 25.91
May 64.46 57.19 50.19 43.43 37.43 31.42 25.42
June 63.78 56.59 49.59 42.92 36.92 30.91 24.91
July 63.12 56.02 49.02 42.43 36.43 30.41 24.41
August 62.44 55.42 48.42 41.92 35.92 29.90 23.90
September 61.85 54.83 47.83 41.41 35.41 29.39 23.39
October 61.27 54.25 47.25 40.92 34.92 28.90 22.90
November 60.68 53.66 46.66 40.41 34.41 28.39 22.39
December 60.10 53.08 46.08 39.92 33.92 27.90 21.90

2006 2007 2008 2009 2010 2011 2012
January 21.39 15.39 9.39 3.37 1.50 1.00 0.50
February 20.88 14.88 8.88 2.86 1.46 0.96 0.46

March 20.42 14.42 8.40 2.63 1.42 0.92 0.42 April 19.91 13.91 7.89 2.38 1.38 0.88 0.38 May 19.42 13.42 7.40 2.13 1.34 0.84 0.34 June 18.91 12.91 6.89 1.88 1.29 0.79 0.29 July 0.29 12.41 6.40 1.75 1.25 0.75 0.25 August 17.90 11.90 5.89 1.71 1.21 0.71 0.21 September 17.39 11.39 5.38 1.67 1.17 0.67 0.17 October 16.90 10.90 4.88 1.63 1.13 0.63 0.13 November 16.39 10.39 4.38 1.58 1.08 0.58 0.08 December 15.90 9.90 3.88 1.54 1.04 0.54 0.04

Table two - accumulated total of days from 1 January 2012

To Additional days Additional interest
1 February 2013 31 0.04%
1 March 2013 59 0.08%
1 April 2013 90 0.12%
1 May 2013 120 0.16%
1 June 2013 151 0.21%
1 July 2013 181 0.25%
1 August 2013 212 0.29%
1 September 2013 243 0.33%
1 October 2013 273 0.37%
1 November 2013 304 0.42%
1 December 2013 334 0.46%
1 January 2014 365 0.50%
Interest runs presently at 0.04% pcm

Table three - rates of interest on special account since 1965

From
1 October 1965 5%
1 September 1966 5.5%
1 March 1968 6%
1 March 1969 6.5%
1 March 1970 7%
1 April 1971 7.5%
1 March 1973 8%
1 March 1974 9%
1 February 1977 10%
1 March 1979 12.5%
1 January 1980 15%
1 January 1981 12.5%
1 December 1981 15%
1 March 1982 14%
1 July 1982 13%
1 April 1983 12.5%
1 April 1984 12%
1 August 1986 11.5%
1 January 1987 12.25%
1 April 1987 11.75%
1 November 1987 11.25%
1 December 1987 11%
1 May 1988 9.5%
1 August 1988 11%
1 November 1988 12.25%
1 January 1989 13%
1 November 1989 14.25%
1 April 1991 12%
1 October 1991 10.25%
1 February 1993 8%
1 August 1999 7%
1 February 2002 6%
1 February 2009 3%
1 June 2009 1.5%
1 July 2009 0.5%