On Friday, May 28, Illinois Governor J.B. Pritzker signed into law the recently passed amendments to 735 ILCS 2-1303 which will allow for prejudgment interest to be collected on judgments at a rate of 6% per annum. The statute does not apply retroactively, and for existing cases the prejudgment interest will begin to accrue on the date of the effective date, which is July 1, 2021. To the extent a plaintiff was the recipient of, and rejected, a written settlement offer, the defendant will be entitled to a reduction in the amount of interest owed by the amount of the rejected written settlement offer if the jury’s verdict exceeds the amount of the offer. If the verdict comes in at less than the amount of the rejected written settlement offer, then no prejudgment interest will be assessed on the judgment.
We have addressed the prejudgment interest debate in prior articles (see links below) – and we are working on additional materials about how clients can best address prejudgment interest in their litigation. The following section highlights changes to the amendment that we believe are of particular interest to our clients. If you have any questions about how this development might affect you, please contact the Johnson & Bell attorney with whom you regularly work or Matthew L. Johnson, who drafted this overview.
Rev. 735 ILCS 2-1303
c) in all actions... brought to recover personal injury/wrongful death...resulting from (or occasioned by the) conduct of..any person or entity..(whether by negligence/willful and wanton misconduct/intentional conduct/strict liability)..the plaintiff shall recover...prejudgment interest...on all damages (except punitive damages, sanctions, statutory attorney’s fees, and statutory costs) set forth in the judgment.
Prejudgment interest shall begin to accrue on the date the action is filed, or after the effective date of the statute for preexisting actions.
If the plaintiff voluntarily dismisses the action and refiles, the accrual of prejudgment interest shall be tolled from the date the action is voluntarily dismissed to the date the action is refiled.
In entering judgment for the plaintiff in the action, the court shall add to the amount of the judgment...interest calculated at the rate of 6% per year on the amount of the judgment (minus punitive damages, sanctions, statutory attorney’s fees, and statutory costs)
If the judgment is greater than the amount of the highest Written Settlement Offer (WSO)...made by the defendant...within 12 months...after the later of (July 1st, 2021 or the filing of the action)..and not accepted by the plaintiff within 90 days...after the date of the offer or rejected by the plaintiff...interest added to the amount of the judgment shall be equal to 6% per year...on the difference between the amount of the judgment (minus punitive damages, sanctions, statutory attorney’s fees, and statutory costs) and the amount of the highest WSO.
If the judgment is equal to or less than the amount of the highest Written Settlement Offer (WSO) made by the defendant within 12 months of July 1st, 2021 or date of filing of the action and not accepted by plaintiff within 90 days after the date of the WSO or rejected by plaintiff, no prejudgment interest shall be added to the amount of the judgment.
For purposes of this subsection, withdrawal of a WSO by defendant shall not be considered a rejection of the offer by plaintiff.
Notwithstanding any other provision of this subsection, prejudgment interest shall accrue for no longer than 5 years.
Notwithstanding any other provision of law, neither the State, a unit of local government, a school district, a community college district, nor any governmental entity is liable to pay pre -judgment interest on an action brought directly or vicariously against it by the injured party.
The effective date of the Act is July 1, 2021.
Related Items
Proposed 9% Prejudgment Interest in Illinois – An Assessment of Its Impact
