Constitutionality in Pre-judgment Interest in Illinois
April 3, 2023
A recent amendment to 735 ILCS 5/2-1303, which provided that prejudgment interest would be permitted in personal injury and wrongful death cases in Illinois, has been the topic of much discussion about its constitutionality since its enactment in May 2021. Unfortunately, that discussion has been limited to circuit court rulings, which means that there is no clarity yet on the issue through a ruling from higher courts.
Initially, the amendment to 735 ILCS 5/2-1303 called for the allowance of prejudgment interest at an annual rate of nine percent. However, due to pressure from several interests, including significant resistance from hospitals and healthcare providers, Governor Pritzker vetoed the proposed change; while he was generally supportive of allowing for prejudgment interest, he found the proposed change could drive up costs for health care. Gov. Pritzker also noted that other states limited prejudgment interest to economic damages and excluded them for future or punitive damages.
In response to these criticisms, the Legislature passed a new version of the amendment, which Gov. Pritzker ultimately signed into law on May 28, 2021, and which is codified at 735 ILCS 5/2-1303(c). This version provided for prejudgment interest in personal injury and wrongful death cases at a rate of six percent, which does not apply to punitive damages, sanctions, attorney’s fees and costs, and with a five-year limit on the period in which interest would accrue. Other limitations apply to the amended statute as well, including a provision that allows prejudgment interest to be avoided “if the judgment is equal to or less than the amount of the highest written settlement offer” made within a year of the filing of the statute; further, the state, and local governmental units, would not have prejudgment interest applied against them in any case.
On May 27, 2022, the Hon. Marcia Maras of the Circuit Court of Cook County held that 735 ILCS 5/2-1303(c) was unconstitutional. In Hyland v. Advocate Health & Hospitals Corp. (No. 2017 L 3541 (Cook Co. Cir. Ct.)), Judge Maras held that §1303(c) violated litigants’ right to a trial by jury, in that jurors can weigh damages for themselves, and incorporate damages for injuries occurring before judgment regularly. She then held that the amendment constituted “special legislation” which confers a benefit on one group while denying it to those similarly situated, without being narrowly tailored to meet a compelling interest.
As a circuit court ruling, Judge Maras’s opinion is not binding on other Illinois state courts. And other judges in Illinois have ruled contrary to her conclusion. For instance, the Hon. Maura Slattery Boyle gave prejudgment interest to the plaintiff in Ahearn v. Heliotis (No. 2017 L 3552 (Cook Co. Cir. Ct.)), finding that the statute at issue was constitutional. Judge Slattery Boyle, relying upon Tri-G Inc. v. Burke Bosselman & Weaver, 222 Ill.2d 218, 256 (Ill. 2006), specifically found that interest is distinguishable from damages; whereas damages are within the province of a jury to decide, interest on those damages is a statutory remedy, and statutes governing how interest accrues are not within a jury’s decision-making power. The Court also found that the enactment of §1303(c) was not “special legislation,” in that the classification that it creates (between personal injury and wrongful death cases on one side, and other tort actions on the other) was “based on reasonable differences in kind or situation… [and was] sufficiently related to the evil to be obviated by the statute,” in line with Best v. Taylor Machine Works, 179 Ill.2d 367, 394 (Ill. 1997). Other judges have entered similar rulings, across the state, which uphold the amendment.
To date, no appellate courts have weighed in on the subject. In fact, Hyland only recently resolved with a judgment in favor of the defendants after trial; the case currently remains before the trial court on post-trial motions. However, at least two cases relating to this issue (Cotton v. Coccaro, No. 1-22-0788 (1st Dist.) and Estate of Smith v. Advocate Health & Hospitals Corp., No. 4-22-0403 (4th Dist.)) have been appealed. We will continue to monitor these cases, and others, and will give our best advice to clients upon the entry of any precedential rulings.