Pritzker’s veto statement on the original bill, HB 3360, stated that while a majority of states do impose prejudgment interest, many of those states, such as Michigan or Wisconsin, provide a more reasonable rate structure by tying the interest rate to market conditions such as the federal prime rate, as opposed to a 9% flat rate.
The Illinois Health and Hospital Association, which opposed the original bill, says it’s neutral on the new proposal, SB 72.
“As a result of lengthy negotiations with the bill sponsor, many of our concerns have been addressed in the amended legislation,” a statement from the state hospital association said.
The healthcare and manufacturing industries opposed the initial proposal, saying it would add billions of dollars in litigation costs for businesses and hospitals already struggling amid the pandemic.
“The changes could substantially add to their borrowing costs, undermine their bond ratings and jeopardize access to capital financing in the markets,” a group of business leaders wrote in an op-ed to Crain’s.
If signed by Pritzker, the compromise bill would take effect July 1. The bill applies to jury verdicts or a judge’s judgment in an injury case, and is meant to incentivize settlements. It excludes state- and local-government owned entities.
In addition to shortening the time interest would accrue and cutting the interest rate, the new bill caps prejudgment interest at five years.
The Illinois Trial Lawyers Association, which backed both bills, sees the compromise as “a win for all parties, plaintiffs and defendants,” said Larry R. Rogers Jr., president of the Illinois Trial Lawyer Association. He said the 6 percent rate and filing date provisions were both fair and negotiated by both the ITLA and the IHA, so he is hopeful Pritzker will sign the bill.
Rogers, who is also on the Cook County Board of Review, wrote in a letter to the editor that the original bill was “necessary is to prevent deep-pocketed defendants from dragging out cases in the hopes that injured parties or their families will become so financially desperate they accept a settlement that is far less than they likely would have received after a favorable verdict.”