The Courts Act 1981 (Interest on Judgment Debts) Order 2016 (SI No 624 of 2016) came into operation on 1 January 2017. The effect of the Order is to reduce the rate of interest payable on judgment debts from 8% to 2%. The 8% rate had applied since January 1989.
In many cases the rate of interest on judgments was academic, as many debtors were only able to pay a fraction of the actual judgment in any event. However, for some debtors it will be very welcome news.
I have no doubt that some people will now decide to stop paying creditors who are charging very high rates of interest, and oblige their creditors to consider obtaining judgment where they will only get 2% interest. Some debtors might use the change to re-negotiate the interest rate on loans etc. Obviously, such debtors would have their credit rating damaged if a judgment was made against them, but their credit rating might have already have been damaged.
I think the 2% rate is too low. The cost of funding for some creditors would be substantially higher, and thus they may stand to lose money on certain types of business.