Step 1: Determine whether the plaintiff is entitled to postjudgment interest Following is a step-by-step guide to calculating either pre or postjudgment interest. In all cases, once set, the prejudgment interest rate remains constant for the life of the judgment.Īll parties awarded money damages by the court are entitled to postjudgment interest. Prejudgment interest is designed to promote settlement between litigants. In this instance, interest begins to accrue on the date the settlement offer was made. 231, 79 N.W.2d 802 (1956).įinally, prejudgment interest is available as a matter of law when the final judgment award exceeds a prior settlement offer by the winning party. It is also awarded if the parties have explicitly agreed, either in their principal contract or in a supplementary stipulation or agreement, that damages will include prejudgment interest. Prejudgment interest “is awarded where the amount of damages is determinable, either because the damages are liquidated or because there is a reasonably certain standard of measurement.” City of Merrill v. The court determines when the judgment starts accruing interest and, if this date is before the judgment was entered, it is determined as prejudgment interest, even as it accrues years after the entry of judgment. The difference between prejudgment and postjudgment interest is defined by when the interest rate is set. If the consent decree does not set a specific rate for judgment interest, the interest rate mandated by Bill 14 applies. This can occur when the parties enter into a consent judgment, a voluntary agreement between the parties that can memorialize the payment of damages. To avoid confusion, parties may choose to opt-out of the new interest rates by negotiating a contract rate of interest where feasible. As a result, creditors may be required to track multiple interest rates within the same case. The difficulty with calculating interest rates under the new formula is that the Federal Reserve prime rate is continuously changing. The new rate scheme applies to all civil money judgments entered on or after Dec. As of July 1, 2012, the rate was 3.25 percent so postjudgment interest on a judgment entered from July 1, 2012, to the end of year would be 4.25 percent until the judgment is paid off. 1 or July 1 of the year in which the judgment was entered. Act 69 adjusted the rate to 1 percent plus the Federal Reserve prime rate as indicated on Jan. Scott Walker signed a bill into law that dramatically reduced Wisconsin’s pre- and postjudgment interest rates.īefore Wisconsin Act 69, the interest rate on Wisconsin civil money judgments was 12 percent - among the highest in the nation. Attorneys need to understand how to correctly calculate judgment interest when advising clients, proposing a judgment or advising the court and working with already entered judgments.Īs part of a Back to Wisconsin special session in the Legislature in 2011, Gov. A basic understanding of Wisconsin’s judgment interest law is a valuable asset for civil lawyers.
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