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What is Prejudgment Interest?

by | Dec 17, 2012 | Personal Injury

Prejudgment interest is available when a demand is made within one year of filing a lawsuit, the settlement offer cannot exceed one and one third of the settlement demand, and the payment of the settlement amount is made within 60 days after the offer in accepted.

On December 13, 2012, the Indiana Supreme Court issued four opinions dealing with the topic of “prejudgment interest,” or the Tort Prejudgment Interest Statute (“TPIS”). The salient points from these cases is as follows: prejudgment interest is available in underinsured motorist cases (Inman v. State Farm Mutual Automobile Insurance Company); because prejudgment interest is a collateral litigation expense, it can be awarded in excess of an insured’s uninsured’s policy limits (Id.); prejudgment interest is discretionary and the trial court judgment does not have to awarded it (Id.); and a request for prejudgment interest must closely comply with the requirements as outlined in Indiana Code § 34-51-4-6. (Kosarko v. Estate of Daniel L. Herndobler; Alsheik v. Guerrero, Individually and as Administratrix of the Estate of I.A.; and Wisner et al v. Laney).

The TPIS is a powerful tool that must be used to maximize a plaintiff’s recovery. TPIS requires an articulate request and applies to all “civil actions arising out of tortuous conduct” even if based on a breach of contract theory of recovery.