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If Illinois' Governor signs HB3360 it would impose a 9% pre-judgment interest.

ABSTRACT: If signed by Governor Pritzker, amended HB 3360 would impose a "litigation penalty" on civil defendants who chose to litigate a case through trial by taxing them with a 9% per annum interest which accrues from notice of injury.

On January 13, 2021, less than 48 hours after amendments to HB 3360 were introduced, the amended bill passed and is ready to go to Governor Prizker’s desk to be signed into law. If Governor Pritzker signs HB 3360, as amended, it would impose a “litigation penalty” on civil defendants by taxing them with a 9% per annum interest on personal injury and wrongful death cases. Under current Illinois law, plaintiffs are not entitled to pre-judgment interest in personal injury cases. If this bill is signed into law personal injury and wrongful death cases in Illinois would be subject to 9% per annum pre-judgment interest accruing from the date the defendant has notice of the injury from the incident itself or a written notice. Notably, the bill would impose prejudgment interest on past injuries and previously filed actions to run from the later of the effective date of the bill or notice of injury to the defendant.  

What constitutes “notice of the injury” is not defined and will likely cause debate. This is in contrast to the very few states that allow pre-judgment interest on personal injury judgments, some of which specify that accrual does not begin until formal written notice of a claim is tendered or until a complaint is filed. Further, other states with pre-judgment interest also do not calculate in future damages unlike this bill.  

This bill would impose interest on damages, such as plaintiff’s medical care costs, that may not have been calculated in advance and liability is uncertain. For example, there are many situations, in litigation, when a defendant has notice of an injury but the medical treatment has not been completed and/or is ongoing so the damages cannot be determined. Further, a defendant may have notice of an injury while liability is unknown. This kind of “litigation penalty” would force the hand of many defendants to settle in order to avoid the tax on their right to jury trial. 

If HB 3360 is enacted, defendants should be mindful of the pre-judgment interest accrual that results from delays in litigation caused by either side or the court, which during the Pandemic, have essentially closed down our court system. Defendants should also be ready to litigate when “notice of an injury” occurred, as it is unclear from the bill when and how that is memorialized.

HB 3360 will amend 735 ILCS 5/2-1303 as follows: 

(c) In all actions brought to recover damages for personal injury or wrongful death resulting from or occasioned by the conduct of any other person or entity, whether by negligence, willful and wanton misconduct, intentional conduct, or strict liability of the other person or entity, the plaintiff shall recover prejudgment interest on all damages set forth in the judgment. Prejudgment interest shall begin to accrue on the date the defendant has notice of the injury from the incident itself or a written notice. In entering judgment for the plaintiff in the action, the court shall add to the amount of the judgment interest on the amount calculated at the rate of 9% per annum. 

It is unclear when Governor Prizker plans to act on the legislation. If you have questions about how this development might impact you or your organization, please contact the author or Baker Sterchi Cowden & Rice.