On March 25, 2021, the Illinois Legislature passed SB 72, which, if not vetoed, will establish prejudgment interest at a 6% annual rate on personal injury actions in Illinois. As passed, the bill would:
- Set the prejudgment interest rate at 6% annually. As with all Illinois prejudgment and post-judgment interest, the rate is simple interest and not compounded.
- The prejudgment interest will only apply to compensatory damages. It will not apply to punitive damages, statutory attorneys’ fees, or costs.
- The interest will run from the date the complaint is filed.
- Interest will be cut off after 5 years, so the maximum interest award would be 30% of the judgment.
- Public entities will be exempt from prejudgment interest.
- If the plaintiff voluntarily dismisses an action and then refiles it, prejudgment interest will be tolled from the date of dismissal until the date it is refiled.
- If the judgment is greater than the amount of the highest written settlement offer made by the defendant within the later of 12 months after the effective date of the Act or the date the complaint was filed, prejudgment interest will be 6% of the difference between the offer and the judgment.
- If the judgment is less than the amount of the highest written settlement offer made by the plaintiff within the first year of the case or the first year after the act is passed, there will be no prejudgment interest.
Governor Pritzker vetoed HB 3360, which was passed in the lame-duck session of the prior legislative session. However, in his veto message, he stated that he supported prejudgment interest, but believed the 9% rate was too high. He also complained that prejudgment interest would be allowed to be calculated on non-economic damages such as pain and suffering, rather than just pecuniary damages. While this bill sets a lower interest rate, it would still apply to non-economic damages. Therefore, Governor Pritzker may sign the bill or issue an amendatory veto which would make it applicable only to pecuniary damages.