Excess interest which the Swords, Co Dublin, branch of Allied Irish Banks charged an accident victim on a £4,000 loan was described as "extraordinary" by a judge in the Circuit Court yesterday.

Judge Esmonde Smyth was told the bank had demanded £3,333.84p interest on the loan which airport clerk, Ms Catherine Dowd, was forced to take out in September 1994 to tide her over during a period of lost earnings. Mr Gavin Ralston, counsel for Ms Dowd, of Shanglass Road, Whitehall, Dublin, said the bank had charged his client "excess interest" of £1,275.25p on top of ordinary debit balance interest of £2,058.59p.

He said the details had been broken down by Mr Donal E. Lennon, assistant manager of AIB, Swords, in a letter to Mangan O'Beirne, solicitors for Ms Dowd, but there had been no explanation of why "excess interest" had been added or what it was.

Mr Declan Doyle, counsel for the two defendants in Ms Dowd's action over two separate motor accidents, said the amount of interest had been challenged by Donaghy and Co, his clients' solicitors, who felt an official of the bank should be brought to court to stand over the charges.

Judge Smyth said the bank figure was "an extraordinary sum of interest" upon which he would make little comment in the absence of an explanation from the bank. "The bank may have a perfectly reasonable explanation for its charges but it seems a very high sum of interest on a capital sum of £4,000," Judge Smyth said.

"It is certainly unusual. The figure now stands at more than £7,300 including excess interest, whatever that is. It would have been interesting to hear what explanation the bank had for such high interest on such a small capital sum," he said.

Mr Doyle said his clients were admitting liability for Ms Dowd's claims against them in relation to two separate accidents and he did not wish to have the matter adjourned to facilitate an explanation from the bank.

Although he would have welcomed the opportunity to ask them some questions about the interest charges he had been instructed to offer a sum of £1,500 in settlement of the bank interest claim. Judge Smyth said he felt this was a very reasonable offer from the defendants.

He said he had to assess damages arising out of two accidents which occurred within weeks of each other in July and August 1994. Ms Dowd had been returning to work in her car after recovering from the first accident when she was struck a second time, through no fault of hers, and injured again.

He awarded her a total of £27,894 damages, for back and hip injuries, to include £1,500 towards the bank interest charges and £6,000 for loss of earnings.

AIB said yesterday that additional interest or surcharge interest is charged on that part of a loan or overdraft which is not in accordance with an agreement reached with the bank.

AIB imposes a monthly interest rate of 0.75 per cent (APR 9.38 per cent) "for unauthorised borrowings", subject to a minimum monthly charge of £2. A spokeswoman said that customers are notified of their liability for surcharges in their loan documentation, if applicable, and, in any event, on the terms and conditions section of their account statement which they receive regularly. "There was no suggestion that AIB's application of excess interest was incorrect," she said of the court case.