The Illinois Trial Lawyers Association may have an argument that under current state policies, well-financed businesses and insurance companies can intimidate injured parties with costly court delays that eventually force them to accept smaller settlements than they are due.
But even if the lawyers are right that this happens routinely -- a point that is open to debate -- the law passed in a late-night rush at the end of the pandemic-shortened legislative session Jan. 13 is not the solution. COVID-weary and ITLA-beholden Democrats in the House and Senate may not have had the strength of will to acknowledge that. Hopefully, Gov. Pritzker will.
His veto can force the legislation back to the drawing board to get the scrutiny and debate it escaped last month.
Under House Bill 3360, plaintiffs who win a personal injury or wrongful death case in court must be paid not only the judgment determined by the court but an additional 9% interest on that judgment dating from the time the defendant first learned of the injury.
That figure, apparently derived from the penalty already allowed under Illinois law for defendants who delay payment after losing a case, is the most openly apparent flaw in this bill. One can understand the logic of making it costly for defendants to withhold payments they've been ordered to submit, but to impose a punitive deterrent on defendants simply for exercising their right to dispute a claim against them is both unjust and vindictive. Two years ago, Gov. Pritzker and state lawmakers called it predatory for lenders to charge up to 9% interest on certain unpaid consumer debt and cut that limit nearly in half. It's hard to see how the number is justified when applied to defendants who want to negotiate or plead claims against them.
The Milliman actuarial consulting firm studied the financial impact of HB 3360, by the way, and determined that through compounding, the new prejudgment figure will increase the cost of claims 72% in Cook and the collar counties, 53% elsewhere in Illinois. These costs eventually are passed along to consumers or force reductions in everything from health care to small retail products and services.
The trial lawyers contend that such computations are deliberately alarming and ignore the expectation that the prejudgment interest will encourage defendants to settle cases more quickly, and they assert that since only 3% of liability cases make it all the way to a court judgment, 97% of cases will not be affected. But this logic fails to recognize that the negotiations leading to those 97% of cases settling out of court will be unavoidably affected by the potential prejudgment costs. The truth is the prejudgment interest, in one way or another, will apply to every liability dispute.
The Illinois Health and Hospital Association says the costs of HB 3360 would leave many small medical operations just one case away from elimination and cause billions of dollars to be diverted from patient care to pay for higher insurance costs and higher settlements.
"That means resources won't be there for vulnerable populations in Chicago and rural communities across the state," the agency says in a position paper on the bill.
People who are harmed by the negligence or wrongdoing of other parties deserve to be compensated, and they ought not be limited or obstructed in the search for justice. HB 3360, however, addresses these noble aims with punishments and regulations that put small businesses at risk, unfairly punish any party wishing to dispute claims against it and drive up health care, product and insurance costs for almost everyone.
Veto the bill, Gov. Pritzker, and tell lawmakers and attorneys to work in the open to find a solution that is not only just but reasonable.