New legislation allows 6% pre-trial interest on most personal injury cases in Illinois; how this levels the playing field against insurance companies delaying cases.

Governor Pritzker recently signed legislation allowing for plaintiffs to collect pretrial interest on money awarded in some civil lawsuits. The new law which went into effect July 1, 2021, grants 6 percent pretrial interest on money awarded to plaintiffs in personal injury and wrongful death actions caused by the negligence, willful and wanton conduct, intentional conduct, or strict liability of another. The interest will be charged on all damages, except punitive damages, sanctions, statutory attorney’s fees, and statutory costs.

Prejudgment interest would not apply in cases involving state and local governments, school districts, community colleges, and other government entities or consumers debt.

Who Benefits from this Legislation?

This new law is beneficial to plaintiffs. Usually when an injured party files a lawsuit for their injuries, they hope that it will be resolved quickly and they will be compensated for their injuries in a timely manner. However that is not always the case. Now plaintiffs can seek pretrial interest on the damages they are awarded and be compensated for the delays many defendants and insurance companies attempt to create for their own benefit.

Additionally, the Prejudgment Interest legislation imposes prejudgment interest on noneconomic damage awards for pain and suffering. Such awards usually can not be calculated with mathematical precision and often make up a large portion of the monetary award in a personal injury or wrongful death verdict. Those who have been injured by the negligence of others may now collect interest on a monetary judgement dating back to the time the lawsuit was filed.  The law is designed to deter defendants and their insurance companies from stalling or delaying cases that would be successful at trial

Before the legislation went into effect, plaintiffs in Illinois received only 9 percent interest post-judgment in Illinois. That means interest accrued on the plaintiff’s monetary award from when the judgment was entered to the time the monetary judgment was paid. Now, those Illinois plaintiffs who have been injured by the negligence of others may collect interest on a monetary judgement dating back to the time the lawsuit was filed to the time that a judgment is made in favor of a Plaintiff.

For example, before the law was passed, if a plaintiff filed a lawsuit, and it took 5 years for the case to go to trial, and plaintiff was awarded $100,000 for their injuries, but it took the defendants 6 years to finally pay the plaintiff, the plaintiff was only allowed to collect interest for those 6 years that defendants delayed payment.

After the new legislation has been enacted, if a plaintiff filed their lawsuit and it took 5 years for the case to go to trial and they are awarded $100,000, they can collect 6% interest for each of the 5 years it took for the case to go to trial, and 9% interest on each year it takes for the defendant to pay the judgment.

Additional Details Illinois Prejudgement Interest 

Here are some other details related to the new law:

According to the new law, for claims that occurred before the effective date, of July 1, 2021, prejudgment interest shall begin on the date the action is filed or the effective date of the bill, whichever is later. So, for example, if a claim occurred before July 1, 2021, and if a lawsuit for that claim is filed on Aug. 1, 2021, prejudgment interest will be calculated from the date of Aug. 1, 2021 However, if the claim occurred before July 1, 2021, and the corresponding lawsuit was already filed and of record in the Illinois court before July 1, 2021, prejudgment interest will begin to be calculated from the date of July 1.

The law also has a mechanism in place designed to deter tortfeasors and defendants from stalling or delaying cases that would be successful at trial and encourages settlement early on. If a defendant makes a settlement offer within 12 months of the filing of an action but a plaintiff rejects the offer, the amount of the offer will be offset from the judgment on which the interest would normally accrue. If the judgment is greater than defendant’s highest settlement offer, then the plaintiff is awarded accrued interest only on the difference. If the judgment is less than or equal to the offer, plaintiff is not eligible for a prejudgment interest award. This provision rewards defendants who make generous settlement offers and punishes those who fail to make meaningful offers or to offer anything at all.

As mentioned in a previous Coffman Law blog, insurance companies are primarily concerned with limiting their potential payouts as much as possible. It is important to remember that, at its core, an insurance company is a business primarily seeking to make a profit for its owners/shareholders. They don’t want to pay for a claim if they don’t have to! When you are injured in a car accident or by slipping and falling in a restaurant, insurance companies will avoid paying for the injuries you suffered.

Insurance companies are notorious for tactics known as Deny, Delay, and Don’t Pay. To improve their profits, insurance companies delay payment of justified claims, deny payment altogether, and defend their actions by forcing claimants to enter litigation. In 2007, CNN conducted an 18-month investigation into the insurance claims practices of the largest American insurance carriers. The investigation revealed that the insurance carriers put their own profits over the rights of the injured, even if the injured person was the insurance carriers own customer.  Recently, the National Law Review compiled a list of the 11 worst insurance companies. The one common denominator among all of the insurance companies on the list is to maximize profits at the expense of their insured, by denying valid claims, delaying ruling on valid claims, and defending against valid claims creating unnecessary obstacles for injured to get the compensation they are entitled to.

Insurance companies are notorious for delaying valid claims while the injured parties medical bills are piling up.  Then once they know that individuals are under financial pressure, they may make a low-ball offer to settle the claim, forcing the injured party to pay out of pocket. Insurance companies are banking on the fact injured parties will accept a low-ball settlement and then be precluded from filing a lawsuit to get full compensation for their injuries.

Leveling the Playing Field

For those that don’t accept the low-ball offer and do decide to file a lawsuit to get full compensation for injuries, there is a long wait between filing the lawsuit and going to trial. This is when the insurance companies lawyers begin their delay tactics.

Coffman Law is hopeful this new Pre-Judgment Interest law will start to reign in the insurance companies and their defense attorney and level the playing field. If the insurance companies and their attorneys continue their antiquated tactics, they will be paying 6% interest on any judgment issued against them.  Hitting them where it matters most to the insurance company… their profits.

About Coffman Law Office P.C.

Coffman Law is Chicago’s leading personal injury law firm and is committed to providing superb legal representation for people who are suffering from severe personal injuries or are dealing with the loss of a loved one due to motor vehicle accidents and/or police and/or correctional officer misconduct. Coffman Law is a results-driven law firm focused on ensuring that clients receive the compassion, attention, and consideration that they need to seek adequate compensation for injuries or loss. The firm is led by Owner and Founding Partner Brian Coffman, who has dedicated his career to helping accident victims navigate the legal system and obtain the compensation they deserve for their injuries. If you have been injured or lost a loved one, contact Coffman Law Offices PC today for a free consultation.