The Illinois Prejudgment Interest Statute is called into question

In 2021, Governor Pritzker signed into law SB 0072, which represented an amendment to the Illinois Prejudgment Interest Statute, 735 ILCS 5/2-1303. The relevant part of the Amendment provides, “In all actions brought to recover damages for personal injury or wrongful death resulting from or occasioned by the conduct of any other person or entity, the plaintiff shall recover prejudgment interest on all damages, except punitive damages, sanctions, statutory attorney’s fees and statutory costs.” The effect of the amendment was to allow interest to accrue commencing at the time of initiating all actions seeking damages for personal injury or wrongful death caused by negligence, willful and wanton misconduct, intentional conduct, or strict liability. From the outset, the Amendment was controversial due to the proposed high rate of interest, 9%. Eventually, the interest was reduced to 6% and the amendment was signed into law with an effective date of July 1, 2021. Prior to this amendment, interest only accrued from the date of judgment. Now, less than a year after becoming effective, the Illinois Prejudgment Interest Statute has been found unconstitutional by Cook County Judge Maria Maras, calling into question whether prejudgment interest will ultimately prevail as the law in Illinois.

The case, Jennifer Hyland v. Advocate Health and Hospitals Corporation d/b/a Advocate Good Samaritan Hospital, et al (Cook County Circuit Court Case No: 2017-L-003541),  involved a medical negligence claim resulting from the preterm births of twins born at Advocate Good Samaritan Hospital. One child, Charlotte survived while the other twin, Jackson, did not. In her complaint, Plaintiff alleges that the preterm labor and birth were caused by negligently administered medication that resulted in allergic reactions due to a failure to monitor. 

While the case was pending, Illinois’ prejudgment interest statute went into effect.  Upon the Amendment becoming law,  an individual physician defendant in Hyland, Dr. Katherine Watson, filed a Motion to Declare SB 0072 Invalid under the Illinois Constitution. In her Motion (which other defendants’ joined in), Dr. Watson alleged that the Amendment violated the following provisions of the Illinois Constitution, (1) the right to a jury trial; (2) the prohibition against special legislation; (3) separation of powers principles; (4) the read three times requirement; and (5) the single issue requirement. Notably, the court ruled the Amendment to be invalid and unconstitutional based on the right of trial by jury and the prohibition against special legislation.

In holding that the Amendment violated Defendants’ rights to trial by jury, the court ultimately sided with the Defendants’ primary argument that “it is the jury’s right and duty to assess damages to compensate a plaintiff and the Amendment violates the fundamental right to jury trial as it improperly strips the function and role of the jury in assessing all issues, including damages, and instead requires an award of prejudgment interest following a verdict against the Defendant.” Plaintiff argued that the threat of prejudgment interest was a needed antidote to counter defendants who refuse to engage in meaningful settlement negotiations until every possible attempt to avoid the inevitable has been made. To combat this, the court provided that persuasive authority in the form of articles and studies exist that strengthens Defendants’ position that juries in Cook County already award interest for the time period between injury and trial as part of damages. 

Lastly, the court held that the Amendment ultimately violated the Illinois Constitution’s prohibition against Special Legislation. In making this determination, the court cited a decision from the Illinois Supreme Court, “the General Assembly is prohibited from conferring a special benefit or privilege upon one person or group and excluding others that are similarly situated.” Best v. Taylor Machine Works. Further, the court provided that “the Amendment divided tort parties into two groups, parties to personal injury and wrongful death actions who are subject to prejudgment interest, and all other tort parties who are not. Moreover, “it clearly and arbitrarily favors personal injury and wrongful death plaintiffs and is not adequately related to any State interest.” As such, the Amendment was determined to be unconstitutional.  

Notably, Judge Mara’s decision does not apply statewide as it is a trial-level decision. Under Illinois Supreme Court Rule 302, the plaintiff has the right to a direct appeal. However, as the case must proceed to trial before there is an appeal, it remains undetermined when the Supreme Court would hear any potential appeal. For the time being, it would be wise for Defendants in Illinois personal injury or wrongful death actions to file an Affirmative Defense citing to the unconstitutionality of the Prejudgment Interest Statute.