Business laws are constantly changing as laws change and court cases interpreting new and old laws happen monthly. One such example of the changing nature of the legal landscape that businesses must endure is a recent bill that allows litigants to collect pretrial interest on civil damages.
House Bill 3360
House Bill 3360 was pushed through last week by the Illinois General Assembly. It allows victims in personal injury and wrongful death lawsuits, like premises liability cases, to collect interest on the money they are eventually awarded, which starts from the moment the death or injury occurred. The prejudgment interest rate is 9%, which is the same as post-judgement interest. However, HB 3360 does not apply to municipalities.
Reasoning behind the bill
This new law is meant as a deterrent to intentional delays and stalling by individuals and companies after they are sued when they know they will lose. Delaying or stalling court cases or settlements can be used as a tactic to get litigants to settle for a lower amount because they would rather have a lower amount now than a higher amount later. These tactics are what this bill now ends, or at least penalizes it.
Most business groups say that this new bill will only further harm businesses that are already struggling in our current economic climate. The further harm results because it penalizes companies for evaluating and considering claims, and now is simply not the time to put additional penalties on struggling businesses. And, during these times of delays, unrelated to either party, businesses will be penalized for delays that they did not cause.
Plus, the bill could also negatively affect settlement negotiations because a potential prejudgment interest award could make settlement look less favorable for litigants. Alternatively, it may force businesses to settle claims they would not otherwise settle because of the extra 9% penalty, even if the business does not believe the claim is valid.
Of course, the bill needs to be signed by the governor before becoming law. But, this is a perfect example of why Chicago, Illinois, businesses need to retain an attorney immediately when presented with even the possibility of business litigation.