Illinois Legislature Provides for Prejudgment Interest on Personal Injury and Wrongful Death Judgments
On January 13, 2021, Illinois House Bill 3360 passed the Illinois Legislature amending section 2-1303 of the Illinois Code of Civil Procedure to provide, for the first time in Illinois personal injury litigation, prejudgment interest on personal injury and wrongful death judgments. The bill has been sent to Governor Pritzker to either approve or veto the proposed law. If Gov. Pritzker does neither, House Bill 3360 will become law in 60 days or by March 14, 2021.
The new law provides for prejudgment interest at the rate of 9% per year. Post-judgment interest remains at 9%.
The 9% prejudgment interest runs from the date the defendant has notice of the injury, either from the incident itself that caused the injury or written notice.
The 9% prejudgment interest is awarded as a matter of law on the entirety of a judgment a plaintiff obtains which may include both economic and non-economic damages as well as awards of future damages such as future pain and suffering.
The 9% prejudgment interest amendment applies retroactively, and thus for any personal injury or wrongful death actions occurring before the effective date of the amendatory act, prejudgment interest shall begin to accrue on the later of the effective date of the amendatory act or the date the tortfeasor had notice of the injury.
The trial court may apportion in its discretion any amount of prejudgment interest between the plaintiff and the State of Illinois and may consider as factors plaintiff’s hardship and the effort to obtain the judgment.
In a January 26, 2021 article published in Illinois Policy, entitled “MADIGAN LEAVES TRIAL LAWYERS WITH PARTING GIFT: UP TO 2 YEARS OF 9% INTEREST,” the editor Brad Weisenstein quoted Illinois Civil Justice League President John Pastuovic that the plaintiff’s bar is already looking at a new pool of work for itself–Covid-19 related litigation:
“It has already become apparent that some personal injury lawyers view individuals exposed to COVID-19 as a large new pool of plaintiffs, and view health care providers and businesses that aid in the response effort or provide essential services as defendants on which to cast blame,” Pastuovic said. “The first lawsuits targeting health care providers, employers, retailers and other businesses for COVID-related injuries have been filed. Many more are to come.”
This new prejudgment interest law will undoubtedly be used by the plaintiffs’ PI bar as a hammer to wrangle out policy limits settlements from insurance companies in any Covid-19 or other types of litigation.
In any litigation moving forward in Illinois, plaintiff’s feet “must be kept to the fire”. Any delays should not be accepted. Any extension of time sought by plaintiff should come with stipulations that prejudgment interest will not be charged for that period.
Some have noted that plaintiffs may try to “goose up” the amount of prejudgment interest by taking voluntary dismissals and then refiling the action. More aggressive action must be taken to defeat such voluntary dismissal motions and make sure that if they are granted, that their terms are just—meaning that prejudgment interest will not be charged in any interim time period.
The Clausen Miller Casualty and Appellate Practice Groups are studying further ways of combatting this new legislation if, as is likely, Governor Pritzker signs this enactment into law, and we will be reporting on the same in future client alerts and our quarterly CM Report. Clausen Miller’s Liability Insurance Coverage Group is available to assess whether prejudgment interest is covered under various client’s insurance policies.