In early January of 2021, the Illinois Legislature passed House Bill 3360. This bill proposed the addition of prejudgment interest on all personal injury and wrongful death claims.
House Bill 3360’s original purpose was to amend a statute relating to mortgage foreclosures and abandoned property. However, the prejudgment interest would apply to all personal injury and wrongful death claims.
House Bill 3360: Prejudgment Interest for Wrongful Death and Personal Injury Awards
Originally, the added provision would allow plaintiffs to recover prejudgment interest on all damages awarded at an interest rate of 9% per year to begin accruing on the date the defendant was notified of the injury. According to the language of the bill, the notice date could either be when the defendant was notified of an injury arising from the incident itself or written notice.
Supporters of civil justice and tort reform and members of the Illinois medical community including the Illinois State Medical Society opposed the bill and urged Governor Pritzker to veto it.
However, supporters of the bill including the Illinois Trial Lawyers Association stated that the bill would help ensure that defendants would not be able to benefit from delaying the resolution of claims.
The bill has the potential to incentivize corporations and businesses to resolve claims in a timely manner rather than dragging them out for years on end. That practice disproportionately affects lower-income plaintiffs that often lack the financial ability to weather the loss of income they face if they are unable to work following an injury.
Senate Bill 72: Amended Prejudgment Interest Bill
Governor Pritzker vetoed House Bill 3360 on March 25, 2021, and expressed concerns over the potential adverse impact on Illinois’s healthcare industry following COVID-19. Following the veto and a series of negotiations between the bill’s sponsors and opponents of the bill, an amendment was submitted for State Senate approval. The new version of the bill, Senate Bill 72, passed both chambers and includes provisions such as:
- Start of prejudgment interest accrual: Prejudgment interest would begin to accrue on the date an action was filed rather than the date of notice to the defendant
- Pending cases: Prejudgment interest would begin to accrue on either the case filing date or the effective date of the act, whichever came later
- Prejudgment interest rate: Lowering the prejudgment interest rate from 9% to 6% per annum
- Plaintiff-driven delays: To address concerns regarding plaintiff-driven delays, prejudgment interest would not accrue between the time of voluntary dismissal and refiling of a case
- Accrual period: The total prejudgment interest accrual period would be capped at five years
Additionally, Senate Bill 72 includes a provision that allows defendants to reduce prejudgment interest through early settlement offers. The value of a settlement offer made within 12 months of the filing of the lawsuit would be credited against the judgment amount rendered at trial before the calculation of prejudgment interest.
Prejudgment interest would not apply if the judgment is less than the highest written settlement offer.
The proposed law would exempt the following entities under Senate Bill 72:
- The state
- Local units of government
- School districts
- Community college districts
- Any governmental entities
Senate Bill 72, passed in both the state house and senate chambers, now awaits approval. If Governor Pritzker signs Senate Bill 72 into law, it would mark the first time in Illinois history that prejudgment interest would be allowed for damages awarded in personal injury and wrongful death claims, including non-economic damages.
For assistance related to personal injury and wrongful death claims get in touch with a Langdon & Emison attorney by calling 866.931.2115.
