Illinois Governor Vetoes 9% Prejudgment Interest Rate Bill but Legislature Passes Compromise Bill for 6%
On March 25, 2021, the Illinois legislature passed SB 72 as a compromise measure in response to Governor JB Pritzker’s veto of HB 3360. Like HB 3360, SB 72 would allow plaintiffs to recover prejudgment interest on court-awarded judgments in personal injury and wrongful death actions.
SB 72, however, relaxes some of the more draconian provisions in HB 3360. For example, SB 72 allows for the accrual of prejudgment interest starting on the date an action is filed, whereas HB 3360 allowed prejudgment interest to accrue from the date the defendant receives notice of the injury. Moreover, SB 72 lowers the interest rate set out in HB 3360 from 9% to 6%, a figure more closely tied to current economic trends and more in line with prejudgment interest rates in other jurisdictions. Finally, SB 72 removes the requirement in HB 3360 that courts consider the plaintiff’s hardship from the date of injury to the date of judgment and the plaintiff’s effort required to obtain the judgment.
Although lawmakers took a step in the right direction by passing SB 72, the bill keeps intact some of HB 3360’s more troubling aspects, such as the assessment of a fixed interest rate. As such, SB 72 will still limit the ability of courts to use discretion when assessing prejudgment interest, thus interfering with the gatekeeping function of trial judges who play a critical role in ensuring the fairness and reasonableness of jury verdicts. Additionally, SB 72, as with HB 3360, provides for the assessment of prejudgment interest on future economic and non-economic damages. This will allow interest to accrue on highly speculative damages during a time when defendants have limited ability to discharge claims against them due to case delays and courthouse closures arising out of the COVID-19 pandemic. Defendants and their attorneys should therefore be mindful of SB 72’s potential ramifications: inflated demand amounts, added pressure on defendants to pre-maturely settle cases, and increased costs of litigation and insurance premiums.
According to Senate President Don Harmon, the chief sponsor of both bills, SB 72 would not apply retroactively, and, if enacted, would become effective this year on June 21. Governor Pritzker has 60 calendar days to sign SB 72 or return it to the legislature with his veto.
Please contact Daniel Schwartz at firstname.lastname@example.org with any questions. A full copy of his article on the original bill is available here.