Opinion ID: 1369316
Heading Depth: 1
Heading Rank: 1

Heading: the interest rate on all existing judgments is changed prospectively from the effective date of the amendment to the statute authorizing the rate

Text: The question of whether a state statute which changes the applicable rate of interest on judgments or verdicts should be applied retroactively, prospectively, or from the effective date of its modification has been a fruitful field for litigation. [2] In several jurisdictions, in the absence of no clearly contrary legislative intent, amendments to interest statutes are applied prospectively. The majority, however, have espoused the view that because interest in tort actions is a statutory obligation, with the right to receive either prejudgment or postjudgment interest dependent on legislative prescription, interest rates on judgments in personal injury actions should reflect statutory changes which occur during the pendency of the obligation to pay the judgment. This rationale is premised on the notion that a claim for damages arising from a personal injury action is unliquidated in the sense that the defendant cannot know, prior to judgment, the precise amount he/she may be required to pay. Because claims for damages in tort actions are unliquidated, at common law interest was not awarded as a part of damages. [3] The more recent trend is a hybrid retrospective/prospective application of changes in the interest rate based on the effective date of the applicable rate-changing statute.