Illinois Civil Procedure Modification Imposes 6% Prejudgment Interest in Private Injuries and Wrongful Death Steps | Hinshaw & Culbertson LLP

On May perhaps 28, 2021, Illinois Governor J.B. Pritzker signed an modification to the Illinois Code of Civil Course of action, 735 ILCS 5/2-1303, that applies a 6% prejudgment interest rate on all damages awarded in particular injury and wrongful dying scenarios. Commencing July 1, 2021, all particular injuries and wrongful demise actions will start off to accrue prejudgment interest from the date the motion is filed or July 1, 2021, whichever date is afterwards. Prejudgment curiosity accrual is minimal to five years.

Frequently Asked Concerns

Q: Who does it implement to?
A: The new prejudgment interest regulation applies, with specified exceptions, to all own damage or wrongful demise steps. The curiosity applies to all groups of damages besides punitive damages, sanctions, statutory attorneys’ costs, and statutory fees.

Prejudgment desire simply cannot be assessed versus the point out, nearby governing administration, school districts, community faculty districts, or any other governmental entity. This signifies that situations where both a general public and nonpublic entity may perhaps be jointly and severally liable could give rise to major conflicts in between the defendants over their skill to minimize off prejudgment fascination with an early settlement supply.

Individual damage and wrongful loss of life steps filed in or eliminated to federal courtroom will not present a secure harbor from prejudgment curiosity. Prejudgment fascination is a make a difference of substantive point out law. (Submit-judgment fascination in federal conditions is procedural and will go on to be governed by 28 U.S.C. § 1961.)

Q: When Does Prejudgment Curiosity Start off to Accrue?
A: The regulation is successful as of July 1, 2021. Following July 1, prejudgment interest will commence to accrue on the date an action is filed. For accidents that occurred ahead of the Act’s helpful date, interest will start out to accrue on the later of the date the action is filed or the powerful day of the invoice. This suggests that pending actions will start out accruing curiosity as of July 1.

If a plaintiff voluntarily dismisses a lawsuit and later refiles, prejudgment interest does not accrue for the duration of the period of time involving dismissal and refiling. Additionally, as observed higher than, prejudgment desire can only operate for a overall of 5 a long time. This correctly caps the whole amount of prejudgment curiosity that could be added to a judgment at 30% of the award (6% fascination for a overall of 5 several years).

Q: Is it Feasible to Restrict Publicity to Prejudgement Fascination?
A: Yes. The prejudgment fascination law makes it possible for defendants to limit their publicity to prejudgment curiosity by producing an early settlement give. The benefit of the best composed settlement offer designed in just the initial 12 months immediately after the lawsuit is filed is credited towards the judgment amount rendered at demo for uses of calculating prejudgment desire. If the judgment is increased than defendant’s best settlement provide, then the plaintiff is awarded accrued curiosity only on the big difference. If the judgment is considerably less than or equal to the provide, plaintiff is not suitable for a prejudgment fascination award.

This provision is intended to encourage get-togethers to settle early. However, 12 months is an particularly quick time interval inside which to investigate and accurately evaluate the value of a case and to make an informed selection on a settlement supply. It puts enormous pressure on the parties to conduct discovery successfully. For instance, if the plaintiff is unresponsive to the defendant’s discovery requests, defense counsel’s capacity to assess legal responsibility and review the plaintiff’s things of distinctive destruction in order to formulate an early settlement present could be negatively influenced. This could enhance the need to have for court docket intervention to acquire timely discovery responses from plaintiffs.

One more query that arises from the 12-thirty day period qualifying settlement offer you provision is how supplemental defendants added right after the 12-month period has expired are to be dealt with. A connected situation is the query of recognize the place the plaintiff can make entire use of the time permitted to outcome services of system beneath Supreme Court docket Rule 103(b). In that circumstance, a defendant could only have eight months in which to set collectively an ideal settlement present.

Q: How Will This Rule Effect Litigation Method?
A: The prejudgment desire regulation sites a top quality on the early, pre-accommodate investigation of likely promises. Defendants—on detect of an accident, injuries, or party resulting in particular damage or loss of life with the likely for litigation—should be very proactive in securing professional medical records, witness statements, and products of unique problems before a go well with is submitted and the 12-thirty day period period for building a settlement supply commences to operate. A very well-formulated settlement provide ought to be viewed as at the earliest feasible moment in buy to mitigate the accrual of prejudgment fascination as a lot as possible.