Recovery of Prejudgment Interest in Negligence Actions in Florida?
04.03.17Florida legislators are considering a bill that would allow Plaintiffs to recover prejudgment interest (“PJI”) in negligence actions. Exposure for Defendants may increase significantly if these legislative efforts are successful.
Presently, two bills are up for consideration by the Florida Legislature. Senate Bill (“SB”) 334 allows for PJI in a negligence action when the plaintiff recovers economic damages which accrue from the date of loss of an economic benefit or payment made by the plaintiff. PJI on costs will begin on the first day of the month immediately following the month in which costs were paid. House Bill (“HB”) 469 allows for PJI in a negligence action when the plaintiff recovers economic damages, which accrue from the date of loss, whereas non-economic damages accrue on the date defendant receives notice of the claim, and attorney fees and costs, if recoverable.
Both bills contain provisions establishing an effective date of July 1, 2017.
Under current law, plaintiffs generally do not recover prejudgment interest in negligence claims because the damages are too speculative. However, plaintiffs are entitled to PJI when a trial court finds plaintiffs have suffered actual, out-of pocket loss at some date prior to entry of the judgment.
The Plaintiffs’ bar overwhelmingly supports these bills. The Florida Chamber of Commerce, Florida Retail Federation (FRF), Associated Industries of Florida (AIF), Property Casualty Insurers Association of America, American Tort Reform Association (ATRA), and a host of other businesses oppose the bills.
Impact on You
The Senate and the House must agree on the final language for the bill to become law. While many believe the legislature will compromise and pass a bill which allows plaintiffs to obtain prejudgment interest, neither of the bills discussed above have been scheduled for a final vote. As such, both bills could be amended prior to being submitted for a final vote, so no one can say with certainty what the final law will look like.
However, what is likely, at a minimum, is that PJI will apply to all economic damages. In accordance with Florida Statute §55.03, the State’s Chief Financial Officer sets prejudgment interest rates. In 2017, the rate is 5.05 per annum. Thus, if plaintiff incurred the loss of an economic benefit of $100,000 in year one, and received a judgment in year four, at a 5.05 per annum rate, PJI would be $23,882.00. The same analysis would apply to non-economic damages which would accrue from the date the Defendant was placed on notice of the claim.
The Bottom Line is This
PJI will inflate lawsuit payouts and increase litigation costs which often times is passed onto the consumer. Potential exposure may increase significantly. Plaintiffs may delay filing lawsuits in order to get the biggest bang for their buck.