Following a torrent of opposition from business groups of all kinds, Illinois’ Democrat-dominated state legislature has approved a replacement for an earlier bill described as a “gift” for trial lawyers, that would have allowed plaintiffs in lawsuits to collect 9% interest on judgments, using a clock that would begin ticking months or even years before their lawsuit was even filed.
Opponents, however, say the measure would still hammer hospitals, doctors, manufacturers and other Illinois businesses with potentially massive added costs from lawsuits, hindering Illinois' economy.
On March 25, the Illinois state Senate approved Senate Bill 72. The legislation had already passed the Illinois House of Representatives, and it is now set to go to Gov. JB Pritzker to be signed into law.
Illinois Manufacturers Association CEO and President Mark Denzler
| Illinois Manufacturers Association
The legislation would allow plaintiffs in lawsuits accusing hospitals, health care providers and other businesses and defendants of personal injuries or wrongful death to collect interest calculated from the time the lawsuit was filed, not just from the time judgment was entered.
Under longstanding Illinois law, personal injury plaintiffs generally were not allowed to collect such interest, for losses they may have incurred before the case headed to court.
Supporters of the legislation, including Illinois trial lawyers and Democratic state lawmakers, said the measure was needed to help encourage settlements of lawsuits, rather than protracted court fights, they said are waged by large corporate defendants and other well-capitalized defendants to wear plaintiffs down and discourage injury claims.
However, the measure represented a compromise from an earlier version of legislation dealing with the same subject. Under the legislation known as House Bill 3660 – which had also been approved by both houses of the Illinois General Assembly – the state would have allowed plaintiffs to collect 9% prejudgment interest, calculated from the time the court determined the defendant first became aware an injury had occurred.
The legislation drew blistering opposition from virtually all Illinois business groups and trade associations, as well as from legal reform advocates. They said the legislation would have ballooned the amount of money that plaintiffs and their lawyers could collect from defendants, as it would allow interest to be collected over a time period that could stretch potentially years before a plaintiff filed suit and could defend themselves in court.
Further, they asserted the law would allow judges to operate as tax collectors, as the law would have allowed courts to assign a portion of such prejudgment interest to Illinois state government agencies.
Opponents noted the legislation was passed as one of the final acts before Illinois’ powerful and long-serving House Speaker, Michael Madigan, was replaced. Madigan, a lawyer by profession, and the Illinois Democratic Party, have long benefited from millions of dollars in steady campaign donations from Illinois’ trial lawyers.
HB3660 represented “nothing more than a shakedown of Illinois employers and a sop to personal injury lawyers,” said American Tort Reform Association President Tiger Joyce in a statement following passage of HB3660 in January.
Moments before the Senate passed the compromise legislation in SB72, Pritzker formally vetoed HB3660.
Despite the changes in the legislation, SB72 still drew sharp opposition from business groups, who said the legislation would still threaten the state’s economy, already struggling under the threat of COVID-19 and the economic and societal restrictions imposed by Pritzker in response to the pandemic.
Mark Denzler, president and CEO of the Illinois Manufacturers Association, urged Pritzker to also veto SB72. He said it would “dramatically increase litigation costs on manufacturers, hospitals, and doctors,” among others.
“Manufacturers across Illinois that have created life-saving vaccines, produced personal protective equipment for first responders and health care professionals and kept grocery stores stocked with safe and nutritious food will be hit with tens of millions of dollars in additional costs,” Denzler said in a released statement. “Illinois’ manufacturers need support from policy makers to create jobs and spur investment in communities around the state, not higher costs that will only stand in the way of our economic recovery.”
The Illinois State Medical Society, which speaks on behalf of many of the state’s doctors, said they “vehemently” oppose SB72.
“This is a wholly new form of “punitive” damages not previously allowed in Illinois. Prejudgment interest will drive up the cost of medical liability insurance, force doctors away from our state and increase the cost of health care,” said ISMS President Robert W. Panton, in a released statement.
“Bottom line, patients will suffer.”