SENATE BILL REPORT
SB 5155
As of January 28, 2021
Title: An act relating to prejudgment interest.
Brief Description: Concerning prejudgment interest.
Sponsors: Senators Kuderer, Wellman, Das and Pedersen.
Brief History:
Committee Activity: Law & Justice: 1/28/21.
Brief Summary of Bill
  • Starts interest running on a judgment for tortious conduct, other than medical malpractice claims, from the date on which the cause of action accrues.
  • Starts interest running on a judgment for a medical malpractice claim from the date of written notice of the claim to the insurer or health care provider, or the date of the filing of the civil action, whichever occurs first.
SENATE COMMITTEE ON LAW & JUSTICE
Staff: Tim Ford (786-7423)
Background:

Interest on Judgments.  Interest on judgments begins to run on date of judgment entry.  For the tortious conduct of a public agency, the post judgment interest rate is 2 percent above the equivalent coupon issue yield, as published by the board of governors of the federal reserve system, of the average bill rate for 26 weeks of treasury bills.  For the tortious conduct of individuals and entities, the post judgment interest rate is 2 percent above the prime rate, as published by the board of governors of the federal reserve system.
Summary of Bill:

Interest on judgments for the tortious conduct of public agencies, individuals, and entities begins to run from the date on which the cause of action accrues.

 

In any medical malpractice action filed after the effective date of this law in which a verdict is rendered or a decision is made for monetary damages, interest shall accrue at the rate of 2 percentage points above the prime rate.  The interest begins to run from:

  • the date of written notice of the claim by the claimant or his or her representative to the malpractice liability insurer or the health care provider; or
  • the filing of the civil action, whichever first occurs.

 

"Medical malpractice" means an actual or alleged negligent act, error, or omission in providing or failing to provide health care services that is actionable under state law governing injuries resulting from health care.
Appropriation: None.
Fiscal Note: Requested on January 22, 2021.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony:

PRO:  This is a fairness bill and it simply moves when prejudgment interest attaches for a claim.  Medical malpractice claims were not intended to be affected by this bill.  Judges could work 24 hours a day and 7 days a week and not be able to climb out of the backlog of jury trial cases that existed prior to, and was made worse by the pandemic.  Judges want parties and attorneys to resolve cases if possible without going to trial.  This bill will help resolve those cases.  Justice delayed is justice denied.  Cases will not settle because the interest under current law accrues from the entry of judgment but if the courts never schedule a trial then the defense has no interest in settlement.  Some civil cases languish six to ten years in court.  This is a thoughtful and modest step.  It gives an incentive to resolve claims.  It is fair because people who are injured will not have to be burdened by paying for all their costs until they receive a judgment.
 
CON:  Adding another element of damages which applies only to the defendants is unfair and will not unclog the courts.  It would apply prejudgment interest to non-economic damages and future damages.  Plaintiffs usually take two to three years before they file a lawsuit, and the courts can take many years before they go to trial, so that defendants would be penalized by paying for prejudgment interest for events out of their control.  The medical community is facing difficult challenges and this would increase health costs. 
Persons Testifying: PRO: Senator Patty Kuderer, Prime Sponsor; Virginia Parham, Wcan; Colleen Durkin Peterson, Washington State Association for Justice; Catherine Clark, Washington State Association for Justice; Darrell Cochran, Washington State Association for Justice; Rebeccah Graham, Washington State Association for Justice.
CON: Cliff Webster, Liability Reform Coalition; Ryan Beaudoin, Washington Defense Trial Lawyers; Katerina LaMarche, Washington State Medical Association; Zosia Stanley, Washington State Hospital Association.
Persons Signed In To Testify But Not Testifying: No one.