Calculation of interest on legal fees

[RobP]

Prior to the NCA, Financial Institutions were restricted in of terms charging interest on legal fees which were capitalised to loan accounts. Although the legal fees had been capitalised, the interest calculation for the legal fee portion of the capital balance was calculated at simple interest and was set at a fixed taxation rate.

The NCA does provide for "Collection costs" being capitalised to a loan account. Would Legal fees be included in this category?

Could anyone please assist .........?

[Dave A]

The NCA does provide for "Collection costs" being capitalised to a loan account. Would Legal fees be included in this category?

By my understanding, yes.

It's also one of the major stumbling blocks when collecting small amounts via legal action given the in duplum rule.

[RobP]

Thanks very much Dave