Illinois Bill Would Impose 9% Prejudgment Interest in Injury Claims
In January, the Illinois General Assembly passed House Bill 3360 that sought to impose a prejudgment interest of 9% per year on wrongful death and personal injury claims. Governor J.B. Pritzker vetoed the bill for several reasons, leading to a few significant changes made to the initial bill. On May 28, the governor signed the compromise bill.
House Bill 3360
Under House Bill 3360, people who won wrongful death or personal injury cases were to be paid the judgment that the court determined and an additional 9% interest on the judgment dating back to the time the defendant first learned of the victim’s injury. The 9% interest and accrual period would make Illinois have one of the highest prejudgment interest rates and earliest start dates in the country.
According to the Illinois Health and Hospital Association, the costs of the bill would severely affect small medical operations, leaving resources unavailable for Chicago’s vulnerable populations as well as rural communities across Illinois.
Governor Pritzker asked the bill’s sponsors to discuss with the defense bar to make the bill fairer for the defendants. He said the bill’s provisions would be a burden to medical professionals and hospitals, possibly driving up healthcare costs. In his veto message, he called for a more reasonable rate structure.
The Revised Bill
In response to Pritzker’s call for a reasonable and just solution, the Illinois legislature passed a compromise bill that is less burdensome for medical professionals and hospitals. Governor Pritzker signed the bill, which will become effective on July 1, 2021. The bill reduces the prejudgment interest to 6% per annum on wrongful death and personal injury lawsuits that reach a verdict. Additionally, it caps the interest at 5 years.
The interest starts accruing when an action is filed but does not apply to:
- Sanctions
- Punitive damages
- Statutory costs
- Statutory attorney’s fees
For pending cases, the prejudgment interest will start accruing from the new law’s effective date.
Suppose a case reaches a verdict and the amount of the judgment is higher than the highest written settlement offer the defendant made in the last 12 months after the filing of a lawsuit or the new law’s effective date, whichever is later. If this offer is refused by the plaintiff or is not accepted within 90 days, the prejudgment interest to be added to the judgment will be based on the amount of the verdict minus the highest written settlement offer, statutory attorney’s fees, and costs, punitive damages, and sanctions.
If the amount of judgment is less than or equal to the highest offer, then the prejudgment interest will not be added.
Personal injury attorneys and other professionals believe that imposition of the 6% prejudgment interest will change how different parties approach wrongful death and personal injury claims in Illinois.