Illinois Gov. JB Pritzker has signed Senate Invoice 72 (Prejudgment Interest Act) into law, which offers for prejudgment desire on all damages rendered in personalized damage and wrongful loss of life claims at the price of 6 p.c for each yr.
The Prejudgment Curiosity Act lets for the calculation of prejudgment interest to start off accruing in specified circumstances described additional down below and will have an speedy effect on circumstances pending in the courts of Illinois.
This Holland & Knight notify summarizes the effects and outcome of the Prejudgment Curiosity Act.
Till Gov. Pritzker’s execution of Senate Bill 72, Illinois regulation did not recognize the award of prejudgment desire in tort actions for individual injury or wrongful dying. In its place, Illinois’ judgment desire statute simply imposed publish-judgment desire in tort steps that accrued at the fee of 9 percent for each yr soon after a court docket issued a judgment award. See 735 ILCS 5/2-1303.
Gov. Pritzker experienced earlier vetoed a similar bill from the Illinois House that sought to add prejudgment desire at the fee of 9 p.c for each 12 months, expressing worry about the statute’s likely adverse affect on the state’s healthcare sector, significantly specified the impact of COVID-19 on that sector of the Illinois financial state. Following the veto, Illinois lawmakers passed a new version of the invoice less than Senate Bill 72, which decreased the prejudgment curiosity amount to 6 per cent. (See past Holland & Knight inform, “Illinois Legislature Submits Revised and Amended Prejudgment Fascination Invoice,” March 31, 2021.)
Software and Outcome
The Prejudgment Fascination Act gives that in all steps for own harm or wrongful demise, with specified exceptions as in depth down below, a plaintiff shall recuperate prejudgment desire on all damages rendered in a judgment in opposition to a tortfeasor at an interest rate of 6 % for each calendar year.
Prejudgment interest would apply only in private damage and wrongful death circumstances that get to verdict. It would not utilize nor be calculated with punitive damages, sanctions, attorney expenses or court docket prices added to a judgment.
The new law sets the commencing of the accrual of prejudgment curiosity on the day that a lawsuit is submitted against the tortfeasor. However, the law also will take into account particular injuries and relevant lawsuits that may have happened and or have been filed before the efficient day of this statute.
The legislation results in being effective on July 1, 2021. The Prejudgment Fascination Act gives that for claims that happened before the productive date, prejudgment interest shall start out on the day the motion is filed or the successful day of the invoice, whichever is later.
Therefore, if a assert transpired in advance of July 1, 2021, and if a lawsuit for that assert is submitted on Aug. 1, 2021, prejudgment desire will be calculated from the day of Aug. 1. Nevertheless, if the declare happened in advance of July 1, 2021, and the corresponding lawsuit was by now filed and of report in the Illinois court prior to July 1, 2021, prejudgment curiosity will start to be calculated from the date of July 1.
The Prejudgment Curiosity Act also features a provision that gives defendants with an opportunity to lessen prejudgment desire through early settlement provides. The price of settlement presents manufactured inside of the first 12 months of the submitting of a lawsuit are to be credited in opposition to the judgment total rendered at demo just before calculating prejudgment fascination, and if that settlement present meets or exceeds the judgment, no prejudgment fascination will utilize.
As a result, for illustration, if a tortfeasor tends to make a settlement offer of $100,000 in the to start with 12 months of a) the powerful day of the Act in scenarios that had been pending right before July 1, 2021, or b) the filing of the lawsuit and verdict quantities to $75,000, no prejudgment interest will use. Conversely, if the maximum settlement offer you by any tortfeasor amounts to $75,000 and the verdict on the judgment is $100,000, the greatest settlement provide will act as a setoff to calculation and prejudgment desire will be assessed only in opposition to $25,000.
Prejudgment interest will also not be calculated and will be tolled during the time period of time following which a claimant voluntarily dismisses an motion and until it is refiled with the court.
Ultimately, the proposed law will not utilize to lawsuits filed in opposition to the state, a community unit of authorities, a college district, local community higher education district or any other governmental entity nor proceed to be calculated after a period of 5 a long time.
This significant alter to the Illinois judgment fascination statute will mark the to start with time that prejudgment interest will be permitted against tortfeasors for individual injury or wrongful demise promises, and tortfeasors have to have to be informed of this new legislation for the possible instant impression on pending circumstances in the Illinois courts.