Jury Awards and Prejudgment Interest in Tort Cases

by Stephen J. Carroll

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This Note reports the preliminary results of research which empirically examines issues central to the prejudgment interest policy debate. The work thus far establishes that juries are implicitly awarding prejudgment interest. The analysis is based on data on all awards returned in civil jury trials in the federal, state, and municipal courts in Cook County, Illinois, from 1960 to 1979 relating to injuries arising from automobile accidents (1,349 cases). Controlling for the severity of injury, it was found that, on average, juries increased awards over and above inflation as measured by the Consumer Price Index at a rate of 3.7 percent per year for the time between injury and trial. Overall, juries implicitly provide prejudgment interest at a rate equal to the underlying inflation rate plus 3.7 percent per year. The Note addresses the implication of these effects for the policy debate about prejudgment interest.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.