Pre-judgment interest legislation would be 'devastating,' say opponents

By Ann Knef | Feb 12, 2009

Ed Murnane

Sen. Haine (D)

A bill introduced in the state Senate last week has a legal reform group gearing up for battle.

Senate Bill 184 would require interest be paid on damage awards --by judgment or arbitration-- from the time a plaintiff files a claim in court. The bill was introduced by Sen. Bill Haine (D) of Alton, and has been assigned to the Senate Judiciary Committee.

Ed Murnane, president of the Illinois Civil Justice League, said the legislation, if enacted, would be "devastating" for the state of Illinois given the current economic climate. He said he is forming a coalition to defeat the measure.

"Illinois is hemorrhaging jobs," he said.

He said 10,700 jobs were lost in Illinois in December and January, according to the Regional Economics Application Laboratory of the University of Illinois at Urbana-Champaign. The report also indicates 147,200 jobs are expected to be lost in 2009, Murnane said.

A lobbyist for Property Casualty Insurance Association of America also is joining the effort to kill the bill.

Attorney Mark Mifflin of Springfield said the legislation sends the wrong message to businesses in a state where the legal climate already favors the plaintiff.

"Clearly this is intended to coerce defendants to settle before having adequate information or risk excessive damages at a later date," Mifflin said.

Mifflin also is a board member of the Illinois Association of Defense Counsel.

Philip Corboy, president of the Illinois Trial Lawyers Association, said there is only one industry that would view the legislation as "devastating."

"The insurance industry knows full well as long as they can delay, delay, delay, delay even on cases...that are going to eventually settle, they're just stringing along the poor plaintiff who doesn't get his benefits for five or six years," he said.

Corboy said there has "got to be an incentive."

Citing 2007 statistics, he also said that 99.5 percent of civil cases in Illinois don't go to jury trial. He said 1,320 cases went to civil juries that year.

According to the proposal, the amount of interest would be calculated by adding 2 percent to the interest rate of the one-year Treasury. At present, that would mean a 2.44 percent interest rate, Corboy said.

He said the amount in question is "miniscule," especially compared to prejudgment interest assessed in Missouri, which is 9 percent, he said.

He also said that Illinois is an "anomaly" in that does not have a prejudgment interest law. Other states including Ohio, Minnesota, Nebraska, Iowa and Michigan, do.

The bill will be taken up at a Senate Judiciary Committee hearing scheduled for Feb. 18.

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