Compound interest on judgment?

The Law Commission has proposed that the courts should be given powers to award compound interest on money judgments for damages. The courts would be able to award simple or compound interest at the rates they saw fit. As a rule, the court would award compound interest at a standard rate – based on the bank rate in force from year to year – with annual rests. The Law Commissioner, Professor Hugh Beale QC, said: ‘The courts’ power to award interest at simple rates but not at compound rates fails to provide an accurate method of compensating claimants who have been kept out of their money. The computer revolution enables compound interest to be calculated quickly and accurately. The courts should be given the discretion to award interest at compound rates that reflect the scale of the claimant’s probable loss.’