FLK1 · Dispute Resolution

Trial, judgment & interest

SQE1 revision notes — the key rules, leading cases and common traps for this topic, in plain English and current to 2026.

DR.10 — Trial, Judgment & Interest

Trial preparation & bundle

The claimant (or party directed) files a trial bundle generally not more than 7 days and not less than 3 days before trial (CPR 39.5). A party must give notice if it intends to rely on a witness statement — a witness who does not attend cannot have their statement used as evidence unless the court permits or it is agreed.

Conduct of trial; non-attendance

Trials are normally in public (CPR 39.2).
If no party attends, the court may strike out the claim and any counterclaim. If the claimant does not attend, it may strike out the claim; if the defendant does not attend, it may strike out the defence and decide on the claimant's evidence (CPR 39.3).
A party who failed to attend may apply to set aside the judgment, but only if it: (a) acted promptly, (b) had good reason for non-attendance, and (c) has a reasonable prospect of success at trial — all three are required.

Judgment & interest

Interest on a debt before judgment: identify the applicable right first. Check any contractual interest term and whether the Late Payment of Commercial Debts (Interest) Act 1998 applies; do not assume that every contract debt starts with the court's discretionary power.
Late Payment Act: for a qualifying debt for the price under a contract for goods or services, where supplier and purchaser both act in the course of a business, the Act implies a right to simple statutory interest (ss.1-3). Excepted contracts include consumer credit agreements and contracts intended to operate as security (s.2(5)). If the contract gives a substantial contractual remedy for late payment (which can be a contractual right to interest), the debt carries that remedy and not statutory interest, unless the parties agree otherwise (s.8(2)). A term that excludes statutory interest without a substantial remedy, or that gives contractual interest which is not a substantial remedy, is void to that extent unless the overall remedy is substantial, so statutory interest still runs (s.8(1), (4)). A remedy is substantial unless it is insufficient to compensate the supplier for late payment or to deter late payment and it would not be fair or reasonable to let it replace the statutory right (s.9(1)).
Start, rate and recovery costs: statutory interest normally runs from the day after the agreed payment day; if none is agreed, it starts after the relevant 30-day period under s.4. That period runs from the later or latest applicable event: performance, notice of the amount due, or the acceptance/verification event specified in s.4. Agreed dates are subject to s.4's public-authority, 60-day and gross-unfairness rules; advance payments have a separate rule. The prescribed annual rate is 8% above the Bank of England reference rate: use the rate in force on the preceding 31 December for interest starting in January-June, or 30 June for July-December (SI 2002/1675, arts.3-4). Once statutory interest starts, s.5A also gives a fixed sum of GBP 40 for a debt below GBP 1,000, GBP 70 for GBP 1,000 to below GBP 10,000, or GBP 100 for GBP 10,000 or more, plus reasonable recovery costs exceeding that sum. Section 5 permits remission where the supplier's conduct makes it just.
The court's debt-interest power: under s.35A Senior Courts Act 1981 (High Court) or s.69 County Courts Act 1984 (County Court), the court may include simple interest on all or part of a debt in the judgment, at the rate it thinks fit (subject to applicable rules) for all or part of the period from accrual of the cause of action to payment or judgment. If the whole debt is paid during proceedings before judgment, subsection (3) provides for liability to simple interest, with the rate, amount and period determined under that provision.
No double interest for the same period: s.35A(4) and s.69(4) bar an award under those sections for a period during which interest on the debt already runs, whatever its source. A qualifying business debt already carrying Late Payment Act interest is therefore not an alternative claim for discretionary s.35A/s.69 interest for that period.
Judgment debts carry interest at 8% under the Judgments Act 1838 (County Court money judgments ≥ £5,000 also attract Judgments Act interest).
PI claims: special damages attract interest (often half average special account rate); general damages for PSLA attract interest at 2% from service of proceedings.

Costs

General rule: loser pays (CPR 44.2), but costs are always discretionary.
Fixed recoverable costs now apply across the fast track and most intermediate-track claims.
Track allocation (CPR Part 26): Part 26 was replaced from 1 October 2023, subject to transitional provisions (SI 2023/572, rr.1-2, 8). Small claims are normally up to GBP 10,000, subject to special limits. For a monetary claim unsuitable for small claims, fast track is normally available up to GBP 25,000, with a trial no longer than one day and the oral-expert limits in r.26.9(6). Intermediate track normally covers claims unsuitable for both lower tracks with monetary relief up to GBP 100,000, subject to r.26.9(7)'s trial, evidence, management and party conditions and rr.26.9(8)-(10). Multi-track is the residual normal track; r.26.9(10) also requires it for specified categories. See DR.05 for the full allocation conditions; value alone is not decisive.

Common traps

All three CPR 39.3 limbs needed to set aside — promptness alone is not enough.
Identify any contractual or Late Payment Act interest before considering s.35A/s.69; interest already running engages the subsection (4) bar.
Do not label all pre-judgment interest discretionary: Late Payment Act statutory interest has a prescribed rate; the s.35A/s.69 debt-interest regime is different.
Indemnity-basis costs (e.g. after beating a Part 36 offer) resolve doubt in the receiving party's favour and ignore proportionality.

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A supplier delivers machinery to a manufacturer under a simple contract, not a deed. On 3 March 2024, its defective machinery causes a fire that seriously burns an adult factory worker and damages the factory. That day the worker knows the burns are serious, that they resulted from the supplier's defective machinery and who the supplier is. He proposes a negligence claim against the supplier for his injuries. The manufacturer proposes a contract claim against the supplier for the factory damage; the contractual breach also occurred on 3 March 2024. Neither claimant is under a disability, and there is no later date of knowledge or concealed fact to consider. Which best states the applicable primary limitation periods, leaving aside any discretionary extension?

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