Illinois allowed Prejudgment Interest in Injury and Wrongful Death Actions

Illinois allowed Prejudgment Interest in Injury and Wrongful Death Actions

The Illinois Legislature passed HB 3360 bill on January 13, 2021. The bill then went to the governor’s assent on February 4 and has been awaiting the signature or veto of Governor Pritzker. The bill will amend the Code of Civil Procedure (735 ILCS 5/2-1303) and will provide plaintiffs with prejudgment interest on all damages awarded in personal injury and wrongful death cases in Illinois. Prior to this amendment, plaintiffs were allowed only to post judgment interest in the personal injury and wrongful death cases.

Numerous discussions have been made by the plaintiff’s bar, the defense bar, and the medical community regarding the possible difficulties of the bill. Law firms like Smith Amundsen, along with others, also urged Governor Pritzker to veto the bill. Therefore, Governor Pritzker’s requested that the bill’s sponsors engage in discussions with the defense bar regarding how the bill could be amended to make the prospect of prejudgment interest fairer to defendants. The two sides have had a series of face-to-face communications. After the discussions, the Illinois Trial Lawyers Association proposed an amendment to HB 3360 that addressed several of the defense bar’s concerns with the bill. House Amendment 2 to State Bill 72 was passed by the Illinois House on March 18, 2021, and Governor vetoed the bill on March 25, 2021. The effective date of the bill will now be July 1, 2021.

The amendment inserted Section 2-1303 (a), which says that prejudgment interest accrues on all damages and not just on economic damages. The interest will also begin to accrue on the date the action is filed, as opposed to the prior law, wherein the interest accrude on the date a defendant has “notice” of an injury. The rate of interest has also been lowered from 9% per annum to 6% per annum. For pending cases, interest will begin accruing on the later of the case filing date or the effective date of the Act. Section 2-1303 (b) (1) of the bill has added definitions “Consumer debt” and Consumer debt judgment”.

The bill has also added equitable limitations, addressing concerns regarding plaintiff-driven delays. Importantly, prejudgment interest would begin accruing when the defendant has notice of the injury from “the incident itself” or upon receipt of “a written notice.” The one exception to this rule applies to injuries or deaths that occurred prior to the effective date of the Act. In those instances, interest will begin to accrue on the later of (1) the date the defendant receives notice or (2) the effective date of the Act.