The case before the Supreme Court stemmed from a dispute between the plaintiff, car accident victim Joel Munoz, and his insurance company, American Family Insurance. The dispute centered around whether or not the insurer had to include prejudgment interest in their settlement payment to Munoz for his accident.
The court’s ruling was that American Family was not required to pay interest on the settlement amount for the months prior to the date a settlement agreement was reached. Legal experts are somewhat split on what this ruling could mean for similar cases moving forward, some arguing that it could result in more litigation being brought to trial, with others arguing this was the right decision for the court to make.
In Rosenberg’s opinion quoted in the article: “Frankly, all the opinion really says is that if you want to recover prejudgement interest you have to file a lawsuit, which is not a remarkable statement in itself. It makes sense; technically speaking, it could result in more claims going into litigation rather than settling.”
“Insurance companies are still going to do what’s in their best interest to do. If paying prejudgment interest is in their best interest, they’re going to do it, whether they call it that or not. It’s not a science, it’s more of an art trying to figure out what a case is worth. I don’t know if it’ll make a huge difference, but around the margins it certainly will. It’ll probably mean cases settling for less that they might otherwise have settled for.”
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