Prejudgment interest accrues from a date set by statute or case law, typically accrual, demand, or filing. Rates and availability vary, and many states exclude it from non-economic damages.
Some statutes tie accrual to a rejected settlement offer.
Alternative Names:
Pre-Judgment Interest, Interest Before Judgment
Why it Matters?
Offer-of-judgment statutes that trigger prejudgment interest on rejection convert a settlement decision into an interest exposure, which can add substantially to a judgment in a case that took years. Where interest runs from accrual on a claim resolved five years later, the addition may exceed twenty percent of the award. Confirming the trigger date and rate early is necessary for accurate reserving.
Frequently Confused with
Related terms
Frequently asked questions
When does prejudgment interest begin?
Why does it matter for reserving?
