When accepting a case involving a claim of bodily injury, defense attorneys will evaluate many factors in an attempt to quantify the expected exposure. A key, but often overlooked aspect of this evaluation is the impact of a statutorily imposed rate of interest applied as of the date of the judgment or verdict. To this end, a bill presently in the New York State Legislature may soon require an even more focused approach to case evaluations and implementation of defense strategy. This article provides a broad overview of the application of prejudgment interest in New York as it pertains to personal injury matters and discusses what the imposition of a “date of accident” interest-accrual means for New York state residents and the New York court system.
Background
As it pertains to personal injury matters, Civil Practice Law & Rules (CPLR) Section 5004 sets forth that a statutory 9% per annum interest rate shall be applied as of the date of judgment or verdict. Although the New York Court of Appeals has reasoned that “the purpose of awarding interest is to make an aggrieved party whole,” there is no question that a 9% interest rate may be perceived by some to be punitive. (Spodek v. Park Property Development Association, 733 NYS2d 674 [2001]).
