“Reforming Utah’s Pre-judgment Interest Statute”

The unfairness of this rule is illustrated by recent cases handled by the firm. In one case, the plaintiff’s attorneys waited to bring suit until the eve of the four year bodily injury statute of limitations and then proceeded to have their case dismissed twice for failure to properly serve the defendant. Strong & Hanni’s client was finally properly served more than eight years after her the accident. As a result the more than $100,000 in medical expenses had become nearly $200,000 simply due to the workings of the statute and plaintiff’s counsel’s inexplicable inability to properly serve the defendant who had resided at the same address for more than two decades.

In another case, there was a delay of nearly six years before the case was set for trial. Six months before trial before trial, the plaintiff underwent a surgery at a cost in excess of $40,000. Under Utah’s current statute, the plaintiff was entitled to six year’s worth of interest (more than $24,000) on the surgical and hospital expenses, even though the expenses was incurred less than six months before trial.

The proposed redline revisions to the statute are set forth below:

Utah Code Ann. § 78B-5-824 (2008)

§ 78B-5-824. Personal injury judgments – Interest authorized

(1)    In all actions brought to recover damages for personal injuries sustained by any person, caused resulting from or occasioned by the tort of any other person, corporation, association, or partnership, whether by the negligence or willful intent of that another person or entity, corporation, association, or partnership, and whether the injury was fatal or otherwise, the plaintiff in the complaint may claim interest on special damages actually incurred. from the date of the occurrence of the act giving rise to the cause of action.

(2) It is the duty of the court, in entering judgment for plaintiff in that action, to add to the    amount of special damages actually incurred that are assessed by the verdict of the jury,    or found by the court, interest on that amount calculated at the legal rate, as defined in Section 15-1-1, from the date of the occurrence of the act giving rise to the cause of action to the date of entering the judgment, and to include it in that judgment.

(3)   Interest claimed on any special damage shall be computed as of July 1 of the year in which that special damage was actually incurred.

(4)    Interest under subsections (1) and (2) shall be simple interest and not compounded.

(5)    As used in this section, “special damages actually incurred” does not include damages for    future medical expenses, loss of future wages, or loss of future earning capacity.   

We expect the plaintiff’s bar to vigorously fight these proposed modifications when the legislature meets in January. Strong & Hanni has been instrumental in working with legislative leaders to see that this statute be made fairer for defendants in civil suits. We will keep you apprised of our efforts to enact this important legislation.

 Summary provided by Stephen J. Trayner