Insurance companies seem to have a reputation. You may have heard the phrase, “delay, delay, delay, don’t pay.” Well, legislators in Springfield are trying to change that. We’ve all experienced interruptions due to the COVID-19 pandemic. Court houses have shut down as well and only relatively recently have cases been back on the court call for mostly remote video link proceedings. This reality has put a lot of injury victims in an unfair holding pattern when it comes to legitimate, meritorious claims. With some Illinois county courts already being among a few of the busiest in the nation, this has made an already frustrating process for plaintiffs an even more difficult one.
People who have been injured because of no fault of their own may not be able to work or earn a living in addition to other financial hardships they may have experienced because of their loss. All this, and we haven’t even begun to discuss their injuries and medical appointments. Corporations and insurance companies don’t often have to deal with similar monetary burdens when a claim arises against them. With few exceptions, they keep operating and generating revenue. The current system seems allows them the benefit of delaying payment on legitimate claims.
In an effort to remedy this situation the Illinois House and Senate passed a bill early in January of 2021, that if Governor Pritzker signs, would add 9% per year prejudgment interest to wrongful death and personal injury verdicts. Currently, the law allows post-judgment interest after a verdict. According to court statistics, the overwhelming majority of cases settle before trial. This bill would only apply to approximately 3% of cases that result in a judge or jury determining if the hurt party bringing the lawsuit had a valid or meritorious case.
Some may argue that this law is unfair to companies that have a right to dispute the value of claims and the government shouldn’t try to speed up payments by making them settle more quickly or face a penalty. However, Illinois is quite late to the game when it comes to this type of law. 46 of 50 states already have some form of a prejudgment interest law on their books. In reality, the law helps to reduce unreasonable delays for legitimate claims. If a case goes to trial and the person who brought the lawsuit loses, of course, no interest will be assessed. An injury or wrongful death claim will still need to be proven in court for this change to apply. Additionally, the passage of this bill won’t make companies pay the full amount of interest if the claim that started before the law takes effect. Instead, yearly interest will start to accrue after the bill becomes law for those cases.
In reality, when it comes to legitimate claims, insurance companies and corporations don’t stand to lose much of anything at all by having to pay interest on cases where they delay settlement. Whereas injury victims with meritorious claims will likely be treated more fairly by having their cases resolves sooner. Moreover, the public will benefit from a court system that is less bogged down by such a large case load. This change could benefit everyone.