When a person gets hurt in an accident, a judgment or settlement usually comes years after the harm occurred. Prejudgment interest bridges the gap. Prejudgment interest is interest a plaintiff can recover on funds due from the date of injury to the entry of judgment. It is meant to compensate victims for the time they have lost money that is owed to them. It does not punish the defendant; it merely acknowledges that money late equals money lost.
Why It Matters for Accident Victims
Suppose you’re in a car accident and miss work for six months and your case takes two years to settle. If you are not able to work, you will be living out of pocket and probably get into debts. To recover fully, you’ll need the court to grant prejudgment interest in accident cases, so your award reflects the actual value of your loss, not just the original amount. It’s a legal tool that pushes defendants to resolve cases faster and prevents delay tactics from saving them money. Without it, long delays effectively devalue your claim. Over time, inflation and financial strain make waiting even more expensive. Prejudgment interest helps restore some of that lost ground.
How It’s Calculated
Every state has a different formula for calculating prejudgment interest. Some have a fixed statutory rate, and some tie it to the market conditions. Some determine simple interest, while others provide for compound interest. The beginning date also differs. It could be the date of injury, date of demand, or the date of filing. That’s why it’s essential to know your state regulations. For example, prejudgment interest on non-pecuniary damages in Ontario is set by statute under the Insurance Act. Interest rates in most U.S. states are enacted by law and applied at the court’s discretion.
Who Is Eligible?
Not every accident victim automatically gets prejudgment interest. Some claims, like pain and suffering, are more likely to qualify than others. Punitive damages, in most places, don’t qualify. The plaintiff must also request it, and courts may deny it if the delays were the plaintiff’s fault. It’s not a guarantee. It’s a legal right that must be pursued and justified. Judges often have discretion, especially when state laws are vague or silent on key details. Even when eligible, the amount awarded can vary widely. That’s why working with a lawyer who understands how to present a strong claim is essential.
Strategies to Maximize It
Request it clearly in your pleadings. Don’t wait. This signals to the court and the defense that you’re serious. Document everything: treatment dates, wage loss, and out-of-pocket expenses. Maintain records showing how early you tried to settle. Courts are more likely to award prejudgment interest when the plaintiff acted in good faith.
Also, don’t assume your lawyer will handle it by default. Bring it up. Some jurisdictions are more generous than others, and skilled attorneys use prejudgment interest as leverage during negotiations. Defense lawyers know the clock is ticking, and interest builds pressure.
Prejudgment interest becomes a necessary remedy after an accident, since victims often wait months or years for compensation, during which medical bills pile up, wages are lost, and life is put on hold. It’s fair compensation for the time victims spend waiting for justice. In the right hands, it strengthens a case and ensures the final amount truly reflects the cost of delay. Accident victims who ignore it leave money on the table. Don’t be one of them. Understand it, demand it, and let the law work for you.
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