Legal disputes settled through the court can take some time to conclude, especially for more complex or complicated cases. This can, however, cause a hardship for the person filing the claim, because they have to wait until the case is concluded for their settlement. In some cases, prejudgment interest can be used to cover the hardship and compensate the person for the amount of time they had to wait to get a settlement.
What is Prejudgment Interest?
In cases where a settlement can take a lot of time, it is beneficial for the victim of the case to learn about prejudgment interest and how it can help them. Prejudgment interest is the amount of interest that can occur over the amount of time from when the accident or legal claim occurred to the time the victim receives the settlement. It is applicable in a number of different cases, from personal injury to business law, real estate law, and more. The amount of money received through prejudgment interest can vary based on the type of case and how long it takes to receive a settlement.
The Purpose of Prejudgment Interest
In some cases, the settlement process can be drawn out significantly as a way to get the victim to settle for less or to allow the opposing party to otherwise financially benefit. However, this can cause an undue hardship for the victim of the case, so prejudgment interest was created as a way to encourage faster resolutions, make the process more fair, and help make the plaintiff whole by accounting for the delay from the time the issue occurred to the time the claim is settled.
Application in Personal Injury Cases
Though there are time limits for filing a personal injury claim, delays and negotiations can take a significant amount of time. During that time, the victim has medical bills, lost wages, and other expenses accruing and may not be able to pay them without the compensation. Prejudgment interest helps to encourage the insurance company to settle faster, so they don’t have to pay as much in interest.
How it Works with Property Damage
If a homeowner or business sustains property damage, they can request compensation from the party that caused it. Like with personal injury cases, it can take some time to go through the settlement process. Prejudgment interest can be used to help minimize the amount of time it takes to negotiate a settlement.
Using Prejudgment Interest in Breach of Contract Cases
In civil lawsuits for breach of contract, the amount of time it takes for the case to conclude can mean the victim was unable to use that money for a significant amount of time. Whether this is for a real estate transaction, a business contract, or another type of contract, it can be vital to recover the loss of the potential use of the funds through prejudgment interest.
If you’re involved in any claim for compensation and are worried about how long it will take or the issues you’ll face because you don’t have compensation yet, prejudgment interest may be one potential resolution. Speak with a lawyer about your case to learn more about all of the options available to you and to get help settling the case faster so you can use the compensation right away.
