Interest as damages and interest on damages

Abstract

The law on interest in English law is a tangled web. This is principally because the common law traditionally set itself against awards of interest and this has resulted in the piecemeal intervention of statutes which allow the award of interest in specific situations. In the leading modern case of Sempra Metals Ltd v IRC the House of Lords reformed the common law as regards awards of interest as compensatory damages for a tort or breach of contract (although the part of the decision that was concerned with interest as restitution of an unjust enrichment, which was the direct claim in question, was overruled by the Supreme Court in Prudential Assurance Co Ltd v HMRC). Sempra Metals was concerned with an award of compound interest (as damages or as restitution) which contrasts with the relevant statutes which allow awards of simple interest only.