prejudgment interest law

Prejudgment Interest Law Signed by Governor

Gov. JB Pritzker has signed a prejudgment interest law that could expedite the resolution of personal injury and wrongful death lawsuits for Illinois plaintiffs.

Law Goes Into Effect in July

Gov. Pritzker signed Illinois Senate Bill 72 (“SB0072”) on May 28, 2021. An amendment to that bill grants 6-percent prejudgment interest on money awarded to plaintiffs in personal injury and wrongful death lawsuits.

Earlier in the year, Pritzker vetoed a bill that would have awarded prejudgment interest of 9 percent, voicing concerns that it could have an adverse impact on the state’s healthcare industry, particularly in light of the COVID-19 pandemic. After Pritzker’s veto, Illinois lawmakers passed a new version as part of SB0072 that lowered the prejudgment interest rate to 6 percent.

The prejudgment interest law will go into effect on July 1, 2021.

Terms of the Prejudgment Interest Law

Prior to the passage of the prejudgment interest law, Illinois did not recognize awards of prejudgment interest in civil actions for personal injury or wrongful death. However, state law did impose post-judgment interest that accrued at the rate of 9 percent annually after a court issued an award.

Under the new law, plaintiffs in personal injury or wrongful death lawsuits can recover prejudgment interest on all damages rendered in a judgment at an interest rate of 6 percent per year (with certain exceptions). However, it will only apply to cases that go to trial and reach a verdict, and it will not take into account any punitive damages, sanctions, attorney fees, or court costs added to a judgment. Additionally, prejudgment interest will also not accrue in lawsuits filed against the state, local units of government, school and community college districts, or any other governmental entity.

The prejudgment interest law sets the date that a lawsuit is filed as the beginning of the accrual period. It will also take into account lawsuits that may have occurred or been filed before July 1, 2021. In those cases, prejudgment interest will start accruing either on the date the lawsuit is filed or on the effective date of the law – whichever is later.

Furthermore, prejudgment interest will not be calculated during the period of time after which a plaintiff voluntarily dismisses a lawsuit and before the suit is refiled with the court. It will also cease to be calculated after a period of five years.

Finally, the Illinois prejudgment interest law includes a provision that gives defendants an opportunity to reduce interest through early settlement offers. Offers made within the first twelve months after a lawsuit is filed are to be credited against the judgment amount rendered at trial before calculating prejudgment interest. If that settlement offer equals or exceeds the final judgment, no prejudgment interest will apply.

How Prejudgment Interest Can Benefit Plaintiffs

With the passage of the prejudgment interest law, Illinois joins 46 other states that already have similar laws on the books. Advocates for prejudgment interest argue that it can help speed the course of justice by motivating insurance companies to resolve personal injury claims more quickly.

Without prejudgment interest, defendants could enjoy financial benefits from dragging out valid personal injury lawsuits. An extended delay would allow a defendant to earn interest on money that otherwise would have been paid to an injured party. It might also increase the likelihood that a plaintiff’s finances will deteriorate to the point where he or she might settle a lawsuit for far less than it is actually worth.

By removing these incentives for defendants and their insurers, the prejudgment interest law could provide injured people with the opportunity to have their day in court and obtain a fair resolution in a timely fashion.

Helping Injured People Get Justice

The prejudgment interest law is certainly a welcome development for Illinois plaintiffs. Nevertheless, the most important element in achieving a successful outcome in a personal injury or wrongful death lawsuit has not changed, and that is retaining skilled legal representation. For this reason, if you have been wrongfully injured because of somebody else’s negligence, consider doing what so many others have done before you and reach out to the dedicated personal injury attorneys at GWC Injury Lawyers LLC.

With more than $2 billion recovered in verdicts and settlements, GWC is one of the leading Personal Injury and Workers’ Compensation law firms in Illinois. No other plaintiff firm in the state is more respected – or more feared – by its adversaries, both inside and outside the courtroom. Our Chicago personal injury lawyers have the experience, the determination, the resources, and the reputation of success necessary to help get you and your family the justice you deserve.

To schedule a free, no-obligation case evaluation with one of our knowledgeable injury attorneys, contact GWC today. You may call our office at (312) 464-1234 or click here to chat with a representative at any time.