Why should Public Act 102-0006, the new law signed by Illinois Governor J.B. Pritzker on May 28, 2021 matter to you? The law becomes effective July 1, 2021. The short answer to why it should matter to you is that on certain personal injury claims, 6% prejudgment interest will accrue.
What Does Prejudgment Interest Apply to and How Does it Work?
Prejudgment interest applies to specific types of injury claims, namely those cases based upon negligence, willful and wanton misconduct, intentional misconduct, or strict liability.
That means that prejudgment interest accrues if the judgment on the case (the verdict in a jury trial or bench trial) is higher than the highest written settlement offer from the defendant in the last 12 months after the later of the effective date of the statute (July 1, 2021) or the filing of the lawsuit.
As long as the offer is not accepted by the plaintiff, six percent interest begins to accrue from that date, rather than the date a judgment is actually entered. The settlement offer must be rejected or not accepted within 90 days. For injuries that occur before the effective date of the new law, interest accrues as of the later of the effective date of the law or the date the lawsuit is filed.
An example would be a case that arises out of a car crash based upon negligence of the other driver. Let’s say the accident happened on January 1, 2021. The plaintiff claims serious injuries and makes a demand for $1 million. The defendant disputes the nature and extent of the injuries and offers, in writing, $50,000 on July 1, 2021. The plaintiff then files suit on July 15, 2022 and proceeds to trial, obtaining a verdict of $500,000 on December 15, 2023.
In that case, six percent is added to the difference between the judgment of $500,000 and the offer of $50,000 ($450,000) less any punitive damages, statutory attorney fees, or costs. So, six percent of $450,000 is $27,000 extra. That interest would begin accruing on July 15, 2022, the date the lawsuit was filed, and continue to accrue up to the December 15, 2023 judgment date.
Why Should You Care?
The new prejudgment interest law will motivate insurance companies to negotiate cases in good faith, settle meritorious cases faster, and pressure them to make legitimate offers rather than use delay as a sword, effectively sitting on their hands until trial.
It means your cases will move through the system faster.
It means you have a more realistic chance to get compensated without having to go to trial.
It means that your lawyer and you are now on closer to equal footing with the wealthy insurance companies and large corporations.
The new law is not perfect, and we do not know exactly how it will operate. We also are not entirely sure to what cases it will apply, since “personal injury” is not defined in the statute. So, employment-related claims may or may not be affected by the new law. Stay tuned.
Good News and a Step in the Right Direction
Movement toward a more level playing field is good news for everyone. It means fairness, quickness, and equity. Like all good things, it comes with compromises. As with all legislation, it is imperfectly written.
Compared to where Illinois was compared to nearly every state in the country, we now are with the 47 other states that have some version of prejudgment interest.
This is a good day for plaintiffs throughout Illinois.
Contact Chicago Personal Injury Lawyer Stephen Hoffman
As in all cases involving injury and potential liability, if you have been hit by a vehicle, you should immediately get medical treatment, report the crash to police and your own insurance company, and contact a lawyer with expertise in your type of case, such as bicycle accidents or pedestrians hit by cars.
If you’ve been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has over 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.
Stephen handles personal injury claims on a contingency fee basis, which means you don’t pay anything up-front, and he only gets paid if you do. Don’t wait another day; contact Stephen now.