Q&A: Charging Interest in a Civil Lawsuit
Charging Interest in a Civil Lawsuit
Question
Hello Rabbi,
Unfortunately, I need to turn to the court after a tenant in a property I rent out is not paying and is ignoring attempts to collect the debt. As far as I know, in Israel according to the law, and according to the accepted practice in the civil courts, the court awards, in addition to the amount of the claim, linkage differentials and interest from the date the obligation began or from the date of the judgment.
Is it permissible to sue for these amounts?
Is it permissible to collect them?
Is there a difference between demanding payment of the full amount awarded by the court in its judgment (which includes interest and linkage), and collecting the debt through the Enforcement and Collection Authority, where they add interest according to their own rules?
(Does the Rabbi's position regarding turning to Israeli courts in monetary disputes affect his answer?)
As stated, unfortunately this is a practical question (and even more unfortunately, I found almost no direct—and clear—discussion of this question in an internet search, even though religious people apparently go to court no less than others, and so I am forced to trouble the Rabbi and ask. Maybe this is only my own limitation, and sorry accordingly), and I would be glad to hear the Rabbi's opinion, if he is able to instruct how, in his view, one should act in such a matter.
Thank you very much in advance.
Answer
If you have the option of going to a rabbinical court (will the tenant comply?), it is preferable to go there. If not, go to court. Afterward, you can waive the interest and linkage if you wish. I am not sure that you need to do so. This is not fixed, explicit interest, and in my view the law of the kingdom is law can impose a monetary penalty on an offender.
Discussion on Answer
I think so. Unlike linkage, interest is a kind of penalty or compensation.
In the corrupt economic system that goes against the Torah (and that I have not heard rabbis—clever in empty casuistry but foolish in the plain meaning of the Torah—speak out against), the Bank of Israel prints money. And that causes the money in your possession to lose value over time (inflation), in addition to raising prices. And that means that the money he pays you later is worth less than what he would pay you immediately. And that is, among other things, what the interest is for.
Can late-payment interest be considered compensatory damages for the return that could have been earned with the money during the time it was withheld?