Jan 1, 1984
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.