CHARLESTON – The West Virginia Supreme Court's annual judgment interest rates are closer to the federal rates now, and a legal reform group thanks lawmakers for making that happen.
On Jan. 3, the court announced the interest rate at 4.5 percent for judgments entered during the 2018 calendar year. The court adds 2 percentage points to the rate set by Fifth Federal Reserve Bank in Richmond, Va. On Jan. 2, that bank's secondary discount rate was 2.5 percent.
"In recent years the judgment interest rate has been as high as 7 percent, which was far higher than the market rate," said Roman Stauffer, executive director of West Virginia Citizens Against Lawsuit Abuse. "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.
"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."
A statewide group for trial attorneys said it was involved in talks regarding that bill last session as well.
"CALA not only continues to mislead West Virginians about our state's legal climate, but also fails to report the fact that WVAJ worked with House Judiciary Chairman John Shott and members of his committee to negotiate the amended version of HB 2678 passed by the Legislature," said Beth White, executive director of the West Virginia Association for Justice. "In fact, the interest rates included in the final bill were recommended by Democratic and Republican trial lawyers serving on the House Judiciary Committee."
Last session, lawmakers passed House Bill 2678, which adjusted the method used to calculate the rate of pre- and post-judgment interest. Justice signed the bill into law March 30.
"We encourage the legislature and Governor Justice to continue enacting much-needed lawsuit reforms," Stauffer said. "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."
