Illinois Prejudgment Announcement

By: Kopka Pinkus Dolin

On May 28, 2021, Illinois Governor J.B. Pritzker signed Public Act 102-0006, which is an amendment to section 735 ILCS 5/2-1303 of the Illinois Code of Civil Procedure. The amendment becomes effective on July 1, 2021.

This particular amendment may significantly increase financial exposure for a Defendant in actions involving personal injuries or wrongful death based on allegations surrounding negligence, willful and wanton misconduct, intentional conduct, or strict liability.

HIGHLIGHTS OF NEW LAW:

• Prejudgment interest of six percent (6%) will begin to accrue on the date the action is filed.
• Prejudgment interest does not apply to punitive damages, sanctions, statutory attorney’s fees, and statutory costs.
• Prejudgment interest shall accrue for no longer than 5 years.

Avoiding Prejudgment Interest:

The amendment calls for a formula to potentially minimize or avoid the addition of prejudgment interest.

• No prejudgment interest shall be added to the amount of the judgment if the judgment is equal to or less than the amount of the highest written settlement offer made by the defendant within 12 months after the date of this amendment or the filing of the action and not accepted by the plaintiff within 90 days after the date of the offer or rejected by the plaintiff.
• For the purposes of this subsection, withdrawal of a settlement offer by defendant shall not be considered a rejection of the offer by the plaintiff.

Practical Considerations and Suggestions:

• Attempt to settle a case early to avoid escalating litigation expenses or other surprises that arise later in the litigation and could greatly inflate the value of the case.
• Make settlement offers in writing and within 12 months.
• Make it a practice to document the dates of all offers setting reminders monitoring the 12 months after filing and 90 days after the offers were extended to avoid prejudgment interest.
• Defense attorneys must be aggressive in obtaining medical bills, records, documentations, and settlement demands as early as possible so that an informed written settlement offer can be extended within the applicable 12-month period.

For more information on this Amendment to the Illinois Code of Civil Procedure, or immediate guidance if you believe that this new law affects you and your organization please contact: Timothy M. Palumbo, Jamaal R. Buchanan, or Thomas J. Olson