What Is Prejudgment Interest?

If you win a personal injury lawsuit, the court will award you damages for medical bills, lost income, pain and suffering, etc. In some cases, you may also be able to recover prejudgment interest. Prejudgment interest is additional compensation awarded for the time between when you were injured until the court entered the judgment. 

Can I Get Prejudgment Interest? 

Missouri law allows prejudgment interest to be awarded under the following circumstances: 

• A demand is made for prejudgment interest in writing and includes a list of the claimant’s medical providers, copies of medical bills, other relevant medical information, and authorization for the defendant (at-fault party) to obtain the claimant’s employment and medical records;
• Interest is calculated beginning 90 days after the insurance company receives the demand letter;
• An affidavit detailing the injuries suffered by the claimant and an explanation of how damages were calculated;
• The demand letter must state that it will be kept open for 90 days;

As long as these requirements are met, and the court’s judgment is greater than the demanded or offered amount, then prejudgment interest can be added to the award. Prejudgment interest will be calculated in a personal injury case at an interest rate equal to the Federal Funds Rate plus 3%.

Why Prejudgment Interest Matters

Victims welcome any additional money on top of a personal injury award. Still, prejudgment interest can also be helpful by motivating defendants to settle a claim rather than take it to trial. For example, suppose your car accident case takes two years until a judgement is issued and you are awarded $500,000. If the legal interest rate was 9%, that would be an additional $90,000 the defendant must pay. In some cases, Missouri also allows post-judgment interest at a rate of 5% plus the prevailing federal funds rate. As a result, if you receive a judgment, you may also be able to obtain interest on the award from when it is issued up until the defendant or their insurance company pays you in full. 

How an Attorney Can Help with Prejudgment Interest

Missouri has many stipulations on how prejudgment interest must be recovered. Therefore, you will need a lawyer with experience with judgment interest calculation and the right knowledge and resources to help protect your rights. Dealing with a severe injury is challenging enough without having to handle the legal side of your claim. With a skilled St. Louis Personal Injury Lawyer on your side, you will not have the stress of gathering documentation, writing the demand letter, and ensuring damages and interest are calculated correctly. Every aspect of your claim will be taken care of for you. 

Sometimes, the language within a demand letter is enough to convince a party of the seriousness of your claim and will successfully resolve a case. Other times, it will only begin a long negotiation process. However, working with an attorney will be your best chance at obtaining fair compensation and the prejudgment interest you deserve.