Illinois Legislature Passes Bill Setting Prejudgment Interest Rate at 9% in Tort Cases

Fundamental changes to the law governing prejudgment interest could soon take effect. HB 3360 passed both houses of the Illinois legislature on January 13, 2021, and now awaits Governor Pritzker’s signature. If enacted, HB 3360 would have serious ramifications for defendants, defense attorneys, and insurance carriers. Specifically, it would nullify Illinois’ longstanding common law rule barring recovery of prejudgment interest in personal injury and wrongful death suits. As a result, case values could rise to account for prejudgment interest awards, giving plaintiffs’ attorneys additional leverage during settlement negotiations and ultimately increasing the cost of coverage. Another concerning aspect of HB 3360 is that the legislature seemingly ignored the foundational differences between economic and non-economic damages. Unlike economic damages, which are tangible and subject to precise calculation, non-economic damages are speculative, discretionary, and cannot be objectively quantified, especially where the plaintiff’s pain and suffering levels fluctuate throughout the litigation. The degree of pain and suffering is even more speculative post-judgment because future non-economic damages, by their very nature, cannot be objectively determined. Further, because HB 3360 allows plaintiffs to recover prejudgment interest on all damages, defendants would have to pay for the interest assessed on expenses paid by third parties, such as health insurers.

Perhaps more problematic for defendants, defense counsel, and insurance carriers is that prejudgment interest under HB 3360 would start accruing on the date defendants receive notice of the injury. Consequently, plaintiffs may begin to immediately notify defendants of their injury, then wait to commence their cause of action until the applicable statute of limitations is almost expired. Plaintiffs could theoretically stall long enough to collect prejudgment interest for two years (i.e. the time limit for filing personal injury claims in Illinois), during which time defense attorneys must sit on their hands, unable to engage in meaningful discovery while paying interest on potentially mitigable damages. While defendants needlessly await service of process, defense attorneys may also find it more difficult to estimate the value of cases and determine their client’s scope of liability. Given the likelihood that case values will go up if HB 3360 is enacted, insurance carriers could begin pressuring defendants to hurriedly settle cases, even at the beginning of discovery. In turn, defense attorneys would have insufficient time to ascertain a fair settlement amount or learn facts justifying a dismissal. Although added settlement pressure and, ipso facto, earlier settlements, could negate at least some of the prejudgment interest costs, they could also create tension between insurance carriers, policyholders, and defense counsel. On top of that, insurance carriers could soon begin urging defense attorneys to settle cases more quickly due to protracted COVID-related case delays. If HB 3360 becomes law, insurance carriers might start applying settlement pressure even sooner – if they haven’t already begun.

Finally, HB 3360 would fix the prejudgment interest rate at nine percent each year following a settlement or court-awarded judgment. This exorbitant rate would allow personal injury plaintiffs to receive more post-judgment compensation from interest assessed on damages than money they would have earned but for their injury. With the exception of Colorado (See Colo. Rev. Stat. § 13-21-101; Rodriguez v. Schutt, 914 P.2d 921, 925 (Colo. 1996)), HB 3360 would also make Illinois’ nine percent rate in personal injury and wrongful death suits higher than the rate in every other jurisdiction. Further, state statutes generally set forth maximum interest rates and authorize courts to determine the appropriate interest percentage. Illinois courts currently have discretion to assess interest when justified by equitable considerations but would lose it entirely if HB 3360 becomes law. See In re Estate of Wernick, 127 Ill. 2d 61, 87-88 (1989). Evidence suggests that disallowing courts from exercising discretion when determining interest rates would heighten the risk that plaintiffs receive excess compensation. According to the Illinois Insurance Association, assessing a nine percent interest rate on Illinois’ top ten largest verdicts in 2019 would have increased total interest payments in these cases from $51,000,000 to nearly $96,000,000.

As if the substantive aspects were not troubling enough, the process by which the General Assembly passed HB 3360 was anything but ordinary. Introduced on February 15, 2019, as a bill to amend the Mortgage Foreclosure Article of the Code of Civil Procedure, HB 3360 passed the House and was referred to the Assignments Committee in the Senate on April 4, 2019. After lying idle for nearly two years in the Senate, the bill suddenly appeared on the Senate calendar for a second reading on January 10, 2021. The following day, Senate President Don Harmon introduced a floor amendment to remove the mortgage foreclosure provisions and add subsections (c) through (f) to section 2-1303 of the Illinois Code of Civil Procedure. After a third reading that same day, the Senate passed the revised version of HB 3360 and sent Senator Harmon’s amendment to the House for a vote. Within hours, the House duly approved the amendment before the General Assembly sent HB 3360 as amended to Governor Pritzker.

Illinois lawmakers are not supposed to pass legislation in this fashion. Pursuant to General Assembly procedural rules, when one of the chambers passes an amended bill that was previously passed by its counterpart chamber, the amended version must return to the committee of origin for consideration. If approved, the full chamber must scrutinize and conduct open floor hearings on the amended bill. Interested parties, such as lobbyists, public interest groups, and individual citizens, must be also given an opportunity to express support or opposition under the Open Meeting Act. Only after this deliberative process concludes can the amended bill pass both chambers.

HB 3360 followed a different trajectory. The version of HB 3360 passed by the House on April 4, 2019, was completely different from the amended version that passed the Senate on January 11, 2021. Therefore, HB 3360 (with Senator Harmon’s amendment) should have been presented to the committee of origin (the House Civil Judiciary Committee) for consideration. This never happened, according to the General Assembly website. Further, the House passed Senator Harmon’s amendment to HB 3360 the same day he filed it even though the amendment fundamentally changed the original bill’s text and subject matter. If House lawmakers had mulled over the changes to HB 3360 in accordance with procedural rules, and if the General Assembly had given the public enough time to opine on the proposed changes in accordance with the Open Meeting Act, the bill may not have passed both chambers in such a short time, especially given the profound impact of the proposed law.

Perhaps lawmakers were trying to slip legislation through the cracks because of the lame-duck session. Perhaps lawmakers were swayed by plaintiffs’ firms and the Illinois Trial Lawyers Association, which have collectively donated more than $370,000, alone, to the campaign finance committee of Senator Harmon. Although we may never know the exact reason for the legislature’s precipitancy in passing HB 3360, we do know one thing: If enacted, it will have far-reaching consequences for defendants, insurance carriers, and defense attorneys. So too will HB 3360 hurt small businesses and safety net hospitals, many of which have closed permanently and are finding it more difficult to obtain insurance coverage because of COVID’s economic fallout.

Please contact Daniel Schwartz at with any questions. A full copy of his article is available here.