NAMIC Issue | Prejudgement Interest Reforms

Prejudgement Interest Reforms [S]

Our Position

In the absence of an applicable statute or rule, the courts have generally applied the traditional common law rule that prejudgment interest is not available in tort actions since the claim for damages is unliquidated. Although well intended, the practical effect can be inequitable and counter productive. For example, prejudgment interest laws can result in over compensation, hold a defendant financially responsible for delay the defendant may not have caused, and impede settlement. Prejudgment interest laws that currently exist and new proposals should be reviewed to ensure that they are structured fairly and in a way designed to foster settlement.