Prejudgment interest is a crucial concept in personal injury law, yet for many people entering the legal system, it often feels like just another confusing term. Filing a lawsuit against the party responsible for your injuries can already bring stress and uncertainty, and the process itself often creates anxiety.
When you take the brave step of pursuing justice, you shouldn’t be penalized by delays or pressured into accepting lowball settlement offers. That’s where prejudgment interest comes in. It represents additional money a court may award to compensate you for the time you should have been paid but weren’t, essentially covering the interest your compensation could have earned during that period of delay.
In this article, you will learn what prejudgment interest is and how it affects your settlement in a personal injury case.
What Is Prejudgment Interest?
Prejudgment interest is additional money the court might grant to compensate for the period you went unpaid. This amount is intended to reflect the interest your wages could have earned during that time. So, it is designed to make things right when insurance companies stall or refuse to settle fairly.
Under California Civil Code 3289, if you offer to settle your personal injury case for a reasonable amount and the other side refuses, and you later win a higher amount at trial, the at-fault party may be ordered to pay 10% annual interest on your court award.
What Is the Purpose of Prejudgment Interest?
Prejudgment interest serves two purposes:
- It compensates you, the injured party, for the time you’ve had to go without money that was rightfully yours.
- It holds the at-fault party accountable by ensuring they don’t benefit from holding onto your money during the legal process.
In most federal court cases, this interest is added to your judgment from the moment it’s awarded until the day it’s fully paid.
Who Is Entitled to Prejudgment Interest in California?
Prejudgment interest in California isn’t something just anyone can claim. It is reserved for those who prevail in court. In legal terms, that means the party that wins the case or succeeds in proving their claim.
And here’s some good news: you don’t have to win the exact amount you asked for to be considered the prevailing party. Even if the court awards you less than you originally sought, you’re still recognized as the rightful winner and entitled to the interest your delayed compensation would’ve earned.
However, if your case is settled before or during trial, no one is declared the prevailing party, so prejudgment interest typically doesn’t apply in those situations.
This rule helps ensure that those who endure the emotional toll, financial strain, and time lost during a lawsuit are fairly compensated, not just for what was owed, but for what they missed out on while waiting for justice.
What Types of Cases May Qualify for Prejudgment Interest?
When someone’s life is greatly affected by a wrongful death, serious personal injury, or a betrayal of trust that doesn’t involve a contract, they may be entitled not just to compensation but also to prejudgment interest. This added amount helps compensate for the time they were unfairly denied what was rightfully theirs.
In these cases, the harm often has a clear dollar value, such as medical bills, lost income, or funeral expenses. These are losses you can point to, calculate, and prove. This means that prejudgment interest mainly applies to cases with proven damages with a specific monetary value.
When Can I Claim It?
You may be entitled to prejudgment interest if all of the following apply:
- You were injured in a personal injury incident (like a car accident) and filed a lawsuit.
- You made a reasonable written settlement offer to the defendant.
- The defendant rejected your offer.
- You went to trial, and the jury awarded you more than what you initially offered.
Let’s say you offered to settle for $100,000. The other side declined. The case goes to court, and the jury awards you $200,000. In this case, the defense may now owe you an extra 10% interest from the date of your offer to the date they finally pay.
That added interest could mean thousands, sometimes even tens of thousands, more in your pocket.
When Is the Interest Not Applicable?
Not all claims qualify. If the damages are harder to put a number on, such as pain and suffering, emotional distress, or the loss of companionship, prejudgment interest typically doesn’t apply. Those losses are deeply personal, and their value can’t be pinned down with certainty.
Also, prejudgment interest is usually not available in federal cases unless the case involves federal law or meets specific conditions, like parties from different states and a claim exceeding $75,000.
Who Decides on the Prejudgment Interest in California?
The decision-maker’s decision regarding prejudgment interest depends on the type of case and the damages involved.
In personal injury and wrongful death cases, the judge usually decides whether prejudgment interest should be awarded and, if so, how much.
However, in some situations, like when CVC 3288 applies, such as cases involving oppression, fraud, or malice, the jury may decide whether to grant interest as part of compensatory damages.
Do I Need a Personal Injury Lawyer for My Case?
Insurance companies often delay, hoping you will accept less just to move on. But with the right attorney, you don’t have to settle for less than you deserve. Prejudgment interest in California holds them accountable for stalling and allows you to recover the full value of your losses, including the time you spent waiting for justice.
Overall, a California personal injury attorney like us can help you by doing the following:
Take the Legal Burden Off Your Shoulders
We dig deep into the details by investigating the accident, gathering solid evidence, and building a strong case to prove who was truly at fault. You can leave the legal complexities to us.
Paperwork? We’ve Got It Covered
From complicated insurance forms to court filings, we make sure every document is accurate and submitted on time. You won’t have to worry about missed deadlines or technical mistakes slowing your case down.
We Fight for Every Dollar You Deserve
Insurance companies may try to offer you less than what you’re owed, but we don’t back down. If they refuse to be fair, we’re ready to take your case to court and fight for full and fair compensation.
You Heal. We’ll Handle the Rest.
This is your time to rest, recover, and rebuild. We’ll connect you with trusted medical professionals and handle every part of your case so you can focus on what matters most, getting your life back.
You’re already paying the price physically and emotionally. Let an experienced California personal injury attorney handle the legal battle and ensure every penny you’re owed, including prejudgment interest, is fought for.
Contact The Law Offices of Larry H. Parker today at 800-333-0000 for a free, compassionate consultation. We don’t charge unless we win your case. Let us help you take back control of your recovery.
Transformed by an accident? We can help you reclaim your rights. Call for a free review of your car accident case.
What Our Clients Say About Us
While many personal injury lawyers may accept your case and build a legal defense, none will champion your cause as fiercely as we do. Our California personal injury attorneys are exceptionally well-equipped to create a flawless claim, as affirmed by our previous clients:
“I absolutely loved my experience with Larry H. Parker. Mitchell Beck is excellent at what he does, he is also very kind and understanding. If you ever need any law representation I recommend you come here!” – Brionna Williams.
Frequently Asked Questions
Accidents may be upsetting and complicated, leaving everyone involved with questions about their rights, obligations, and legal alternatives. Understanding the aftermath of an accident is critical for safeguarding your rights and getting proper compensation.
If you have further questions, we have answered some of the most frequently asked questions about personal injury.
- Can I Switch California Personal Injury Lawyers?
- California Personal Injury Settlements: Taxable or Not?
- 4 Reasons Why Your Personal Injury Case Is Going To Trial
- Why Won’t a California Personal Injury Attorney Take My Case?
References
California Civil Code 3289. (n.d.). California Legislative Information. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=3289
