Both sides of prejudgment interest debate have merit

While the monetary difference between old and new prejudgment interest rate rules isn’t substantial, the overall issue for insurance companies is, Toronto personal injury lawyerDarryl Singer tells Law Times.

The Ontario Court of Appeal is currently considering whether a rule that replaced the former prejudgment interest rate of five per cent with the lower current bank rate is retroactive, reports Law Times.

The legal publication says in recent months, Ontario courts have come down on either side of the issue of prejudgment interest following changes in legislation that replaced the former rate of five per cent with the lower current bank rate.

“The issue stems from an amendment on Jan. 1, 2015, that changed the amount of prejudgment interest for some cases,” says the article.

“One decision earlier this year, Cirillo v. Rizzo, found the change to be retroactive while another one, El-Khodr v. Lackie, later found that earlier ruling to be wrong. The latter case is under appeal,” reports Law Times.

Singer tells Law Times he agrees with El-Khodr, but he understands the reasoning in Cirillo.

“It can’t possibly be fair for them to, many years later, take advantage of the legislative change,” says Singer. “It’s an important issue for the personal injury bar.”