Amends calculations of interest in civil actions a rate determined by average accepted auction price for last auction of 52 week U.S. treasury bills.
Impact
The implementation of H7955 is expected to standardize how interest is calculated in civil actions across the state, potentially affecting a wide range of civil litigation from personal injury to contract disputes. By basing interest calculations on a fixed percentage compounded in line with government securities (specifically the average accepted auction price for fifty-two-week U.S. treasury bills), the bill aims to provide a clear, predictable framework for plaintiffs seeking damages. Proponents argue that this change will enhance fairness in compensation outcomes and reduce uncertainty regarding post-judgment interest, thereby encouraging timely resolutions of civil disputes.
Summary
House Bill 7955, introduced by Representative Alex S. Finkelman, seeks to amend the calculations of interest applied to judgments in civil actions under Rhode Island law. Specifically, the bill stipulates that in any civil action where a verdict is rendered for pecuniary damages, interest should be applied at a rate of twelve percent (12%) per annum. This interest will accrue from the date the cause of action arose until entry of judgment, unless existing contractual obligations stipulate already defined interest provisions. For civil actions involving medical malpractice, the calculation shall be based on the date of written notice of the claim to the insurer or healthcare provider, whichever comes first.
Contention
Potential points of contention surrounding H7955 may arise from differing perspectives on the appropriateness of a fixed interest rate in the context of variable economic conditions. Some stakeholders may argue that linking it to treasury bill auctions is beneficial as it reflects a stable economic benchmark, while others could contend that a fixed 12% rate may be excessive or inadequate depending on prevailing economic conditions, thereby impacting judicial discretion. Additionally, any implications for the financial burden on defendants in civil actions could also be a topic of debate, particularly among organizations representing businesses and healthcare providers who might face increased costs if interest accrual becomes more aggressive in nature.