A new law has gone into effect in Illinois which will provide 6% interest to injured Plaintiffs who are victorious at trial after having a settlement demand rejected by a Defendant. From the time that a lawsuit is filed, the Plaintiff will be entitled to interest following a victory at trial to the extent of the amount of the verdict exceeds the settlement offer of the Defendant.
In March of 2021, Senate Bill 72 was passed by the Illinois Senate through a 37 to 17 vote, implementing for prejudgment interest to be made available for victims of personal injury and wrongful death cases, and ultimately incentivize settlements in these cases.
The purpose of the SB 72 is to help facilitate an economic balance between both parties as most defendants have their legal costs covered through their representing insurance companies. This is very different than the plaintiff -or the party who is suing- who commonly undergoes financial difficulties while they await the verdict.
In Illinois, a prejudgment interest is set at 5 percent, but prior to this law has never applied to a personal injury or wrongful death case. This prejudgment interest is only available to damages regarding specific cases. Illinois also has a post-judgment interest that is collected after a court issued judgement award at 9 percent. The SB 72 includes a reduced interest rate from 9 percent to 6 percent, that would be only applicable to person injury and wrongful death cases. Though, it would not be applied towards lawsuits against the state, or any other governmental unit.
The law also outlines that the accruing of interest shall begin once a lawsuit is filed, different from the earlier version that indicated the start time beginning once the defendant was provided with “notice of the injury from the time of the incident itself or a written notice”.
Like the earlier version, the SB 72 states that cases resolved through settlement out of court are not eligible.
As said by the Trial Lawyer Association President, Larry Rogers Jr., it helps to prevent a ‘delay, deny and don’t pay’ perspective.
Supporters see this bill as a form of encouraging lawsuit settlements rather than prolonging court battles funded by large corporate defendants that wear down plaintiffs and discourage injury claims.
The Illinois Chamber of Commerce, Illinois College of Emergency Physicians, the Illinois Defense Counsel, Illinois Manufactures Association, National Association of Mutual Insurance Companies, Illinois Retail Merchants Association, along with a number of hospitals are opposed of the SB 72.
The argument made by Mark Denzler, president and CEO of the Illinois Manufactures’ Association, mentions concern for manufacturers, hospital, and doctors who will ultimately face an increase in litigation costs if passed.
Adding to that argument, Minority Leader, Dan McConchie states that “this legislation will increase costs for Illinois small business owners who are simply attempting to get people back to work in our communities”.
The President of the Illinois Medical Society, Robert W. Panton, also agrees that the new bill will create a “wholly new form of ‘punitive’ damages not previously allowed in Illinois”.
Previously, Pritzker’s veto message emphasized this interest rate to be “burdensome for hospitals and medical professionals beyond the national norm, potentially driving up healthcare costs for patients and deterring physicians from practicing in Illinois.” He called for more reasonable rates that would accommodate the market conditions instead of a basic flat rate. This resulted in the 6% rate becoming law.
As of May 28, the SB 72 has now been signed by Gov. JB Pritzker and will take effect on June 21, 2021.
If you’re injured in an accident that is not your fault, contact Brent Eames. Brent Eames is a Chicago personal injury attorney, and he can help you find justice and the financial compensation you deserve.