Recently, the Illinois Appellate Court for the First District, in Cotton v. Coccaro, Case No: 1-22-0899, affirmed the constitutionality of The Illinois Prejudgment Interest Act (Illinois Senate Bill 72, which amended 735 ILCS 5/2-1303) (the "Act"). The Act provides for prejudgment interest to be awarded in all personal injury or wrongful death cases caused by negligence, willful and wanton conduct, intentional conduct, or strict liability. Interest begins to accumulate on the date the action is filed and accrues at a 6% per annum rate on the entire judgment, minus any punitive damages, sanctions, or attorneys' fees. The Act provides for a reduced prejudgment interest amount if a defendant makes a written settlement offer within 12 months of the filing date of the action and the plaintiff rejects or does not respond to the offer.
In Cotton, the plaintiff brought a medical negligence claim and obtained a jury verdict in the amount of $6,528,000. Following the verdict, the plaintiff filed a post-trial motion to request prejudgment interest pursuant to the Act. The trial court entered a judgment against the defendants that included $111,332.29 in prejudgment interest. The defendants appealed the judgment to the Appellate Court of Illinois, First District, contesting the constitutionality of the Act.
On June 9, 2023, the appellate court entered an opinion finding the Act to be constitutional. The court noted that forty-six states allow for some form of prejudgment interest and that Illinois has allowed for prejudgment interest for over a century where authorized by statute, contract, or equity. The court held that the Act did not violate a defendant's right to a jury trial because prejudgment interest is a statutory add-on to a jury's award of damages, has no effect on a jury's calculation of damages, and bears no relationship to a plaintiff's actual injury. The court further held that prejudgment interest does not lead to duplicative recovery.
In its decision, the appellate court validated the Illinois legislature's interests in passing the Act - incentivizing the efficient settlement of claims and reducing the backlog of cases on the civil docket- and found that the Act was rationally related to furthering those interests. The court then determined that the Act does not run afoul of the Illinois Constitution's prohibition on special legislation, stating that a legislature may choose to enact reforms in a way that applies to some parties, but not others. The court further found that all procedural requirements relating to the Act's enactment had been met, and rejected the defendants' contentions that the Act violates the separation of powers because the recovery of interest in Illinois is entirely statutory and the General Assembly thus has the authority to enact laws providing prejudgment interest. Finally, in determining that the law applies only to tortious conduct that occurred before the law was passed and not judgments entered before its effective date, the court found that the Act was not being applied retroactively.
The appellate court's ruling in Cotton is binding on trial courts within the First District. Notably, however, last year, a Circuit Court of Cook County ruled the Act to be unconstitutional in Hyland v. Advocate Health and Hosp. Corp., Case No: 2017-L-3541. Lewis Rice published a Client Alert on the Hyland decision in July 2022 suggesting that defendants in personal injury and wrongful death cases in Illinois utilize Hyland to challenge the constitutionality of the Act. This approach remains available to defendants in Illinois until the Illinois Supreme Court rules on the constitutionality of the Act.
Doug would like to thank Austin Schorfheide for his contributions to this article.
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