Bill Sponsors
Representative Alex S. Finkelman
Committee
House Judiciary
Summary
Select
This legislation changes how interest is calculated on financial awards in civil lawsuits. Currently, interest is set at a fixed rate of 12% per year and begins accumulating from the date the incident occurred. Under this bill, the interest rate will instead be variable, based on the rate of 52-week United States Treasury bills. Furthermore, the interest will only start accumulating from the date the lawsuit is actually filed in court. The bill also removes specific rules that previously applied to medical malpractice cases, subjecting them to this new general standard.
Sponsor
Analysis
Pros for Progressives
- Eliminates the "windfall" nature of a fixed 12% interest rate, ensuring that compensation is more aligned with actual economic conditions rather than serving as an excessive penalty.
- Standardizes the legal process by removing specific exemptions for medical providers, thereby creating a more uniform system of justice for all civil defendants.
- Encourages plaintiffs to file lawsuits promptly rather than delaying, which helps ensure that cases are heard while evidence is fresh and witnesses are available.
Cons for Progressives
- Significantly reduces the financial compensation available to victims of negligence by replacing the 12% interest rate with Treasury rates, which are historically much lower.
- Disadvantages injured individuals by changing the interest accrual start date to the filing of the lawsuit, failing to compensate them for the time lost between the injury and the legal action.
- Benefits insurance companies and large corporations by reducing the financial cost of losing a lawsuit, potentially incentivizing them to drag out litigation against under-resourced plaintiffs.
Pros for Conservatives
- Reduces the financial burden on businesses and insurers by lowering prejudgment interest rates to reflect actual market conditions rather than an arbitrary and punitive 12%.
- Eliminates incentives for plaintiffs to delay filing lawsuits simply to accumulate high-interest returns, promoting a more efficient and timely resolution of legal disputes.
- Protects defendants from excessive liabilities that can arise from long delays between an incident and the filing of a lawsuit, ensuring damages are compensatory rather than punitive.
Cons for Conservatives
- Surrenders state control over judicial interest rates by tying them to federal Treasury yields, effectively subjecting state law to federal monetary policy.
- Introduces financial unpredictability for businesses, as they can no longer calculate potential liabilities based on a fixed percentage but must rely on fluctuating federal rates.
- Removes the specific legislative framework previously established for medical malpractice, which could create uncertainty for healthcare providers who relied on the prior statute.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Plaintiffs in civil lawsuits
- Defendants in civil lawsuits
- Insurance companies
- Medical providers
- Attorneys
Towns Affected
All
Cost to Taxpayers
None
Revenue Generated
None
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/09/2026 Introduced, referred to House Judiciary
Bill Text
SECTION 1. Section 9-21-10 of the General Laws in Chapter 9-21 entitled "Judgments, Orders, and Decrees" is hereby amended to read as follows:
9-21-10. Interest in civil actions.
(a) In any civil action in which a verdict is rendered or a decision made for pecuniary damages, there shall be added by the clerk of the court to the amount of damages interest at the rate of twelve percent (12%) per annum thereon from the date the cause of action accrued of the filing of the civil action calculated at a rate equal to the coupon issue yield equivalent, as determined by the United States secretary of the treasury, of the average accepted auction price for the last auction of fifty-two (52) week United States treasury bills settled immediately preceding the date of the filing of the action, which shall be included in the judgment entered therein. Post-judgment interest shall be calculated at the rate of twelve percent (12%) per annum and accrue on both the principal amount of the judgment and the prejudgment interest entered therein a rate equal to the coupon issue yield equivalent, as determined by the United States secretary of the treasury, of the average accepted auction price for the last auction of fifty-two (52) week United States treasury bills settled immediately preceding the date of the filing of the action. This section shall not apply until entry of judgment or to any contractual obligation where interest is already provided.
(b) Subsection (a) shall not apply in any action filed on or after January 1, 1987, for personal injury or wrongful death filed against a licensed physician, hospital, clinic, health maintenance organization, professional service corporation providing health care services, dentist, or dental hygienist based on professional negligence. In all such medical malpractice actions in which a verdict is rendered or a decision made for pecuniary damages, there shall be added by the clerk of the court to the amount of damages interest at the rate of twelve percent (12%) per annum thereon from the date of written notice of the claim by the claimant or his or her representative to the malpractice liability insurer, or to the medical or dental health care provider or the filing of the civil action, whichever first occurs.
SECTION 2. This act shall take effect upon passage.
9-21-10. Interest in civil actions.
SECTION 2. This act shall take effect upon passage.