When am I entitled to pre-judgment or post-judgment interest?

If you are awarded a monetary amount in a court settlement, there are many situations in which you will be entitled to pre-judgment or post-judgment interest on the total. When this is allowed and how much the interest will be, as well as how it is calculated, will depend on the state in which you live, the type of judgment, and a variety of other factors.

Understanding Interest and Damage Awards

Many courts will offer pre-judgment interest or post-judgment interest, meaning that you may be entitled to collect interest on the amount due to you from the time period before the case was settled (pre-judgment) and/or from the time the case is settled to the time the settlement is actually paid to you (post-judgment). The exact time period at which interest begins to accrue is normally determined based on the type of case:

• Typically, in a contract action, interest would be payable from the date the debt was due.
• In an accident case, interest typically begins to run only after the judgment is entered.

In general, per federal law, any money judgment that is awarded in a civil court case and/or recovered in a district court is eligible for interest accrual. This interest will be dictated and can be collected by the state martial, and is typically added onto the total due by the judge at the time the settlement is officially handed down at the close of the case.

The exact amounts of pre-judgment interest and post-judgment interest awarded will vary, but will generally be decided by the court. The typical situation allows for an interest rate that matches that of the average one-year Treasury yield rate, based on the Federal Reserve system at the time of the judgment.

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Case Studies: Entitlement to Pre-Judgment or Post-Judgment Interest

Case Study 1: Pre-Judgment Interest

Sarah files a personal injury lawsuit against a negligent driver for injuries sustained in a car accident. The court awards Sarah a monetary amount as a settlement for her damages. Sarah’s attorney argues that she should be entitled to pre-judgment interest on the settlement amount.

Sarah’s attorney asserts that she should be compensated for the time period before the case was settled (pre-judgment) by including pre-judgment interest on the settlement amount. The specific rules and calculations for pre-judgment interest will depend on the state’s laws and the court’s discretion. The court considers the arguments presented by Sarah’s attorney and decides to award the settlement amount.

Case Study 2: Post-Judgment Interest

John sues his former business partner for breach of contract and the court rules in John’s favor, awarding him a monetary judgment. However, the business partner delays payment of the judgment amount. In this case, John seeks post-judgment interest on the unpaid judgment amount. Post-judgment interest is applicable from the time the case is settled to the time the settlement is actually paid to the prevailing party.

The rules and calculations for post-judgment interest will depend on state laws and court discretion. The court acknowledges the delayed payment by the business partner and grants John’s request for post-judgment interest. The interest rate and the specific period for which it accrues will be determined by the court based on applicable laws and the circumstances of the case.

Case Study 3: Entitlement to Pre-Judgment or Post-Judgment Interest

In this case study, Jane is involved in a breach of contract dispute with her former employer, Global Solutions Inc. Jane claims that Global Solutions Inc. failed to pay her the agreed-upon severance package after her employment was terminated. Frustrated with the situation, Jane decides to pursue legal action and files a lawsuit against Global Solutions Inc. to seek the unpaid severance benefits.

During the court proceedings, both parties present their arguments, evidence, and witnesses. The court carefully reviews the contractual terms, employment records, and relevant documentation to assess the merits of the case. After considering all the evidence and legal arguments, the court finds in favor of Jane, ruling that Global Solutions Inc. breached the contract by not providing the promised severance package.

Getting Help

To understand all of the rules regarding your right to recover a civil judgment, speak to a lawyer who is familiar with the rules in your state.

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