Pre-Judgment Interest Small Claims New Brunswick

You are owed $18,000 and interest has been accruing for two years. Can you claim that interest in Small Claims Court? Yes — but the way pre-judgment interest interacts with the $20,000 jurisdictional ceiling creates a trap that catches people off guard.

Pre-Judgment Interest Counts Toward the $20,000 Limit

Under Section 5 of the Small Claims Act, the $20,000 ceiling is inclusive of pre-judgment interest accrued up to the date of judgment but exclusive of costs. This means if your principal claim is $18,000 and two years of interest at a hypothetical agreed rate of 5% adds $1,800, your total claim for jurisdictional purposes is $19,800 — safely within the limit.

But if the principal is $19,500 and interest pushes the total past $20,000, the claim exceeds the court's jurisdiction. You either need to abandon the excess on Form 1 (permanently forfeiting the abandoned amount) or take the case to the Court of King's Bench.

Court costs — the filing fee, service costs, and witness allowances — are excluded from the $20,000 calculation. So your filing fee of $50 or $150 does not eat into your jurisdictional room.

When You Can Claim Pre-Judgment Interest

Pre-judgment interest is available in two situations:

Contractual interest: If your contract, invoice, or loan agreement specifies an interest rate, you can claim interest at that rate from the date payment was due. State the contractual rate and calculation basis on Form 1.

Interest on a debt: Under Section 58(1) of the General Regulation, interest on a debt is calculated at the rate the parties agreed to, through the date of judgment. Interest on damages: Under Section 58(2), the Adjudicator may award pre-judgment interest through the date of judgment.

In both cases, you must explicitly claim interest on Form 1. If you do not ask for it, the court will not award it on its own.

How to Calculate and Present Your Interest Claim

The calculation for contractual interest is straightforward:

Principal × Annual Rate × (Days from Due Date to Filing Date ÷ 365)

For example, a $12,000 debt at 2% annual interest, overdue for 18 months (548 days): $12,000 × 0.02 × (548 ÷ 365) = $360.33

On Form 1, state:

• The principal amount ($12,000)
• The interest rate (2% per annum, per contract dated [date])
• The period (from [due date] to [date of filing])
• The calculated amount ($360.33)
• That interest continues to accrue to the date of judgment

Attach a copy of the contract clause or invoice specifying the interest rate as part of your evidence bundle.

For a damages claim, state on Form 1 that you are asking for pre-judgment interest under Section 58(2). Bring records showing the loss and when the amount ought reasonably to have been paid so the Adjudicator can consider the appropriate period.

Interest and the Abandonment Trap

If your principal plus interest exceeds $20,000, you have three options:

1. Abandon the excess — write on Form 1 that you abandon $X to bring the claim within $20,000. Under Section 8 of the Small Claims Act, this abandonment is permanent. You cannot recover the abandoned amount in Small Claims Court or any other court.
2. Claim less interest — reduce the interest period or waive interest entirely to stay under the cap.
3. File in the Court of King's Bench — if the total justifies it, file in the superior court instead. This involves higher costs, stricter procedures, and longer timelines.

The safest approach is to calculate principal plus interest at the date of filing, confirm the total is comfortably below $20,000, and note on Form 1 that interest continues to accrue.

Post-Judgment Interest

Once the judgment takes effect, it bears interest at 7% per year under Section 58(3) of the General Regulation. This is separate from pre-judgment interest and does not need to be claimed on Form 1.

Your Next Step

Getting the interest calculation right on Form 1 matters — an error can push your claim over the limit or leave money on the table. The New Brunswick small claims filing guide includes a fee calculator worksheet that walks through the interest math alongside filing fees and service costs.

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