An amendment to the Illinois Code of Civil Procedure provides that all actions for damages for personal injury or culpable homicide will be subject to default interest of six percent from the date the lawsuit is brought. Interest on arrears does not apply to punitive damages, sanctions, legal attorney fees and legal costs.
On May 28, 2021, Illinois Governor JB Pritzker signed Public Act 102-0006 amending Section 735 of ILCS 5 / 2-1303 of the Illinois Code of Civil Procedure. The change will take effect on July 1, 2021.
The change applies to claims based on negligence, intent, intent or strict liability. However, the amendment does not define the term “personal injury”, so its impact on labor law claims is uncertain.
If the judgment is higher than the amount of the defendant’s highest written settlement offer in the last 12 months following the date the new law came into effect or the lawsuit was brought and is not accepted by the plaintiff within 90 days of the plaintiff’s offer or other rejection of the judgment six percent interest equal to the difference between the amount of the judgment minus punitive damages, sanctions and attorney’s fees and costs as well as the amount of the highest written settlement offer
If the judgment is equal to or less than the highest written settlement offer, no pre-trial interest will be charged on the judgment.
For violations that occur prior to the effective date of the new law, pre-trial interest will start running from the effective date or the date the lawsuit is brought. In any case, there is no prepayment interest for more than five years.
Since interest accrues with filing a lawsuit and because lawsuits often take several years to settle, the new law can significantly increase a defendant’s financial risk in acts of personal injury or wrongful death.
© 2021National Law Review, Volume XI, Number 152