LM-2023-000035 - [2025] EWHC 2168 (Comm)

Mr Reay suggested that there should be no pre judgment interest at all because the claimant had enjoyed a substantial windfall as a result of fluctuations in exchange rates between the Euro and the US Dollar. I reject that submission.

Contrary to Mr Reay’s submission, an award of interest as I have set out, does not offend the compensatory principle. Rather, it applies it through the fiction (almost invariably applied) that the Claimant would borrow the sum it has been deprived of in the currency that sum is to be paid in. That is a sensible and apt way to compensate the Claimant because it chose to contract for payment in Euro. Mr Reay invites me (in effect) to look at what the Claimant would have done with the Euros (converted them into US Dollars) and then investigate the Claimant’s actual loss (which would be zero). In my view such an approach would be impermissible, see paragraphs 7 and 8 of Henderson v Salica [2025] EWHC 838 (Comm) referring to Carrasco v Johnson [2018] EWCA Civ 87 and Challinor v Bellis [2013] EWHC 620 (Ch).

The Court of Appeal in the first case noted the exercise was to be approached “broadly” and not as an assessment of actual loss suffered (“damage done”). In the second case Hildyard J (reciting submissions but in circumstances where both he and Calver J adopted those submissions) said:

“For practical reasons [the court] will not make an enquiry into the claimant's actual loss; nor will it enquire or speculate as to what the claimant would have done with the money had he not been deprived of it. The Court almost invariably adopts as its measure what it would have cost a person in broadly the same position as the claimant to borrow the money of which he was deprived….”