How Interest on Damages Works Under the Civil Liability Act Section 18

Interest is not always the first thing people think about when preparing a personal injury claim. But in matters involving significant sums or lengthy periods between the date of injury and resolution, interest can make a meaningful difference to the final outcome.

Under the Civil Liability Act 2002, Section 18 creates a specific interest regime that operates differently from the general interest rules that apply in other litigation. Understanding how it works is important for anyone preparing or reviewing a damages assessment.

What Section 18 Covers

Section 18 of the Civil Liability Act 2002 provides for the payment of interest on damages in personal injury matters covered by that Act.

Unlike the pre-judgment interest regime under the Uniform Civil Procedure Rules, which is linked to the RBA cash rate, Section 18 uses a different benchmark. The interest rate is set by reference to the Commonwealth Government 10-year benchmark bond rate, as published by the Reserve Bank of Australia.

This rate is updated twice each year:

• On the first business day of January, applying to the period from 1 March to 31 August of that year

• On the first business day of July, applying to the period from 1 September to the last day of February of the following year

Recent Rates

The rates under Section 18 have shifted considerably in recent years, reflecting broader movements in the bond market.

For the period from 1 September 2025 to 28 February 2026, the applicable rate was 4.12%.

This compares to earlier periods where the rate was considerably lower, including 0.94% for the period from 1 September 2020 to 28 February 2021.

For matters where the claim extends across multiple years, the interest calculation must apply the correct rate for each applicable period rather than a single blended figure.

How This Differs From Pre-Judgment Interest Under the UCPR

The general pre-judgment interest regime under the Uniform Civil Procedure Rules uses a margin of 4% above the RBA cash rate. The post-judgment regime uses a margin of 6%.

Section 18 under the Civil Liability Act uses the 10-year bond rate directly, without an added margin.

In practice, the applicable framework depends on which Act governs the claim. Not all personal injury matters fall under the Civil Liability Act, and applying the wrong interest calculation to the wrong matter is a straightforward but consequential error.

The Specific Heads of Damage Where Interest Applies

Interest does not automatically apply to every component of a damages award. The rules on which heads of damage attract interest, and for what period, are important.

Generally speaking, interest applies to past economic loss and past non-economic loss for the period from the date of injury to the date of judgment or settlement. It does not apply to future losses, because those amounts are already discounted to present value.

Confirming which components attract interest, and applying the correct rate across each relevant period, is an important part of preparing an accurate damages schedule.

Why This Matters in Practice

In matters that have taken several years to resolve, the interest component can be substantial. A past economic loss of several hundred thousand dollars, calculated over a multi-year period, will attract interest that could add tens of thousands of dollars to the total claim.

If the wrong rate or the wrong framework is used, the final figure will be incorrect. This can affect negotiations, create disputes between the parties, or result in an award that must be revisited.

The Role of Forensic Accounting

At DB Forensic, we regularly prepare damages schedules that include an interest component calculated under the applicable legislative framework.

We maintain current and historical interest rates under both the Uniform Civil Procedure Rules and Section 18 of the Civil Liability Act, apply the correct rates across each relevant period, and present the calculations in a format that is clear and easy to follow.

For legal teams dealing with matters that involve significant past loss periods, having the interest component correctly and transparently calculated can reduce the risk of dispute and strengthen the overall presentation of the claim.

Want to Check the Interest Calculation in Your Matter

If you are working through a damages assessment and want to make sure the interest component has been correctly applied, DB Forensic can help.

Talk to DB Forensic About Your Damages Schedule