Loyola University Chicago School of Law, JD 2022
On March 25, 2021, Illinois Governor J.B. Pritzker vetoed HB 3360, which would have allowed plaintiffs to recover prejudgment interest, at a rate of nine percent, on all damages related to personal injuries or wrongful death. The governor believed this bill was too burdensome on hospitals and healthcare providers since most Illinois hospitals are self-insured, making them directly responsible for paying the costs of this legislation. However, the governor’s veto letter expressed a willingness to pass prejudgment interest legislation if problems with the current bill, including more robust protections for health care providers, were addressed. That same day, the Illinois House and Senate passed SB 72, which addressed some of the governor’s concerns.
Differences between the new and previous bill
SB 72, which passed both houses on March 25, 2021, is similar to HB 3360 but makes some changes to the previous prejudgment interest bill. The new bill allows plaintiffs to recover prejudgment interest from all damages that resulted from personal injuries or wrongful death except punitive damages, sanctions, statutory attorney’s fees, and statutory costs delineated in the court’s judgment.
This is different from the previous prejudgment interest bill, which allowed recovery on all damages, including non-economic damages, such as punitive damages. The previous bill would have allowed plaintiffs to recover damages that are indirectly related to the underlying injury, such as pain and suffering. Plaintiffs could also recover from future medical costs that were not yet incurred. In other words, since the previous bill had such a broad definition of damages, it entailed anything that was directly or indirectly related to the underlying injury.
Further, unlike the previous legislation, prejudgment interest would begin accruing on the date an action is filed rather than when the defendant receives notice of the injury. This is an improvement from the previous bill, which allowed interests to accrue as soon as the defendant became aware of the plaintiff’s injury.
The proposed rate that would apply to prejudgment interest is set at six percent per annum on the amount of the judgment minus punitive damages, sanctions, statutory attorney’s fees, and statutory costs. This change is another improvement from the previous bill, which had a rate of nine percent per annum. Further, the new bill imposes a limit on the accrual of prejudgment interest to no longer than five years. Under SB 72, prejudgment interest will not apply to the state, units of local government, school and community college districts, or any other government entity.
Additionally, SB 72 includes new language that was previously not included in HB 3360. For example, the bill prevents prejudgment interest from continuing to accrue if the plaintiff voluntarily dismissed the action. In this instance, accrual is tolled until the plaintiff refiles the action. This change is likely a response to concerns from opponents of the previous bill that believed plaintiffs would attempt to delay an action to take advantage of the accrual of prejudgment interest. However, this new language does not account for delays other than voluntary dismissal caused by the plaintiffs in litigation. Thus, presumably, prejudgment interest would continue to accrue if there is any other type of delay.
Proponents believe the new bill will encourage settlements
Proponents believe that this legislation will ensure speedier settlements and discourage delay tactics. The Illinois Senate President, Senator Don Harmon, believes this bill’s passage will encourage settlements, which is much needed since plaintiffs often face loss of income while awaiting the verdict. Similarly, the Illinois Trial Lawyers Association believes this bill is meant to deter court disputes, which large corporate defendants wage to wear plaintiffs down and discourage injury claims.
Opponents believe the new bill will be too burdensome on healthcare providers
Although SB 72 provides some significant changes, such as lowering the interest rate to six percent, which is similar to other states’ interest rates, it still does not address some of the governor’s concerns. The bill still does not provide any safeguards to hospitals and health care providers who would be responsible for paying prejudgment interest. Thus, litigation costs would still increase dramatically for manufacturers, hospitals, and healthcare providers that have been on the front lines during the current pandemic. The President of the Illinois State Medical Society, Robert Wanton, said that this legislation has the potential of driving up the cost of medical liability insurance, forcing doctors away from Illinois, and increase the cost of health care. Although the bill includes significant improvements, it will undoubtedly affect insurance premiums, healthcare costs, and litigation strategies if signed by Governor Pritzker. The bill, however, is still expected to be signed by Governor Pritzker.