Prejudgment Interest (Proposed Amendment)

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Bottom Line:

The Illinois State Bar Association has proposed a bill that would award plaintiffs prejudgment interest to successful plaintiffs in nearly all Illinois tort cases, including medical malpractice cases. The proposal gives a defendant 120 days to make an offer of settlement after the defendant files an answer to the plaintiff's complaint to avoid paying prejudgment interest. If the plaintiff does not accept the offer within 30 days, and a verdict or settlement is entered against the defendat at a later time, the defendant will have to pay prejudgment interest on that award. If the 120 day period passes and the defendant does not make an offer to settle, the defendant will have to pay prejudgment interest on any settlment or verdict. If interest is assessed against a defendant, it will accrue from the date the lawsuit is filed until the date of the settlement or verdict. For example, if a lawsuit is filed today and the defendant does not make an offer to settle the case within 120 days, then if a settlement or verdict is entered two years from now, a prejudgment interest rate will be added to the amount of the settlement or verdict. The proposal is for the law to take effect on January 1, 2010.

The ISBA is expected to vote on the proposal on December 13, 2008. Not surprisingly, the Illinois Assocation of Defense Trial Counsel is opposing the proposal. Attached is the proposed amendment and the Defense Trial Counsel's objections to it.