WVCALA: Lawsuit Reform Results In Lower Judgment Interest Rates
Press release received from WVCALA
Charleston, W.Va. – Judgment interest rates in West Virginia are more closely aligned with the federal rate as a result of a recently enacted lawsuit reform according to legal watchdog group West Virginia Citizens Against Lawsuit Abuse (WV CALA).
“In recent years the judgment interest rate has been as high as 7.00 percent, which was far higher than the market rate. Thankfully our legislature passed, and Governor Jim Justice signed into law a much-needed reform last year which brought the judgment interest rate much closer to the federal rate,” said Roman Stauffer, Executive Director of WV CALA.
On Wednesday, the Supreme Court of Appeals of West Virginia announced the interest rate at 4.5 percent for judgments entered during the 2018 calendar year. The Court adds two percentage points to the rate set by the Fifth Federal Reserve Bank in Richmond, Virginia. That bank’s secondary discount rate on January 2, 2018, was 2.5 percent.
“When the statutory rate of interest is significantly higher than the market rate, personal injury lawyers have a financial incentive to delay cases to increase court award totals, and defendants are penalized for delays that may be beyond their control. Also, defendants may have a financial incentive to settle their cases quickly to minimize additional losses from high judgment interest rates.
In 2017, a bi-partisan coalition of legislators passed House Bill 2678, which adjusted the method used to calculate the rate of pre- and post-judgment interest. Governor Justice signed the bill into law on March 30, 2017.
“We encourage the legislature and Governor Justice to continue enacting much-needed lawsuit reforms. As the 2018 Regular Legislative Session begins, our members will be encouraging lawmakers to look at areas where our civil justice system is out of step with a majority of states across the country,” concluded Stauffer.
West Virginia Citizens Against Lawsuit Abuse is a nonprofit citizen watchdog group with 30,000 members interested in a broad range of civil justice issues. For more information, visit http://www.WVCALA.org.