Prejudgment interest may be allowed in personal injury and wrongful death claims

Thompson Coburn LLP

Thompson Coburn LLP

On January 13, 2021 – just before the Illinois legislature’s final session ended – both houses passed controversial Illinois HB3360, which amends 735 ILCS 5/2-1303 regarding interest on judgments. If signed by Governor Pritzker, the bill will award plaintiffs in personal injury and wrongful death cases prejudgment interest at 9% per annum.

Prejudgment interest is recoverable in Illinois only where authorized by contract or statute. Before now, no statute has authorized prejudgment interest in personal injury cases. HB3360 would change this for all actions involving personal injury or wrongful death, whether by negligence, willful and wanton misconduct, intentional conduct or strict liability.

Importantly, prejudgment interest would begin accruing when the defendant has notice of the injury from “the incident itself” or upon receipt of “a written notice.” The one exception to this rule applies to injuries or deaths that occurred prior to the effective date of the act. In those instances, interest will begin to accrue the later of (1) the date the defendant receives notice or (2) the effective date of the act.

The bill does not appear to give courts discretion in awarding these damages, instead directing them to calculate and tack on the prejudgment interest at the time judgment is entered. Nor does the bill permit courts to account for delays caused by parties or events not under defendants’ control when calculating the damages. As a result, if a plaintiff delays filing her case until the day before the statute of limitation expires, prejudgment interest will accrue during that entire time. Similarly, if the case progresses slowly through the courts – say, for instance, due to a global pandemic that brings the courts to a grinding halt – the prejudgment interest continues to accrue.

The bill does not affect post-judgment interest, which is already recoverable at a rate of 9% per annum.[1]

[1] 735 ILCS 5/12-109 and 735 ILCS 5/2-1303.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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