Litigation takes years, and the award arrives in judgment-day dollars for injury-day losses. Interest is how the difference gets paid, or quietly does not.
Start a conversation with Cournot, the Institute’s damages concierge, already scoped to prejudgment interest. Pick a starting point, or describe the dispute directly.
Between the injury and the judgment sits time, often years of it, and during that time the plaintiff lived without money it should have had. Prejudgment interest is the machinery that compensates for the delay, and it divides cleanly into what the law fixes and what remains to be argued. Entitlement, whether interest is available for the claim at all, and the rate, where a statute prescribes one, are legal questions, and regimes vary enormously: some fix generous rates, some fix rates far below any market, some leave rate and method to the tribunal's discretion. The economics enters wherever discretion lives. What rate would actually make the plaintiff whole: the return it would have earned on the money, its own borrowing cost during the period, or the defendant's unsecured borrowing rate, on the theory that an unpaid claim is an involuntary loan to the defendant? Simple or compound, where the choice is open, with compounding the economically coherent answer for multi-year periods and the difference growing geometrically with time? And from when does interest run on each component of the loss: a single accrual date flatters losses that arrived over time, and a schedule that accrues interest as each period's loss occurred is both more accurate and more work. In long-running matters these choices can rival the principal itself, which is precisely why they deserve modeling rather than a default: the interest line is frequently the largest single number in the case that nobody analyzed.
Entitlement is counsel’s. Everything below it benefits from economics.
Whether interest is available, and under what framework. Pure law, and the frame everything else lives in.
Plaintiff’s lost return, plaintiff’s borrowing cost, or defendant’s cost of unsecured credit. Different theories, different numbers.
Where the choice is open: compounding matches how money actually behaves, and the gap grows with every year of delay.
When interest starts on each piece of the loss. Losses that accrued over years should not all earn interest from day one.
Where prejudgment ends and post-judgment begins, and how the award’s components map onto the seam.
Interest may be taxed differently from the damages it rides on, which matters for making the plaintiff actually whole.
How the Institute approaches an interest question.
In long-running matters, sometimes as much as liability arguments do.
Money earns returns on returns; simple interest pretends it does not. Over a short case the difference is small. Over a decade of litigation it is large, and it grows every year the case continues. Where the method is open to argument, the compounding question deserves numbers, not a default.
Each answers a different question about the same delay, which is why computing them in parallel is more useful than debating them in the abstract. The plaintiff's lost-return theory asks what the money would have earned in the plaintiff's hands, natural where the plaintiff demonstrably invests at known rates. The borrowing-cost theory asks what the plaintiff paid to replace the missing money, natural where the injury forced real financing. The coerced-loan theory prices the delay as credit extended to the defendant, at the defendant's unsecured rate, and carries an intuitive fairness argument: the defendant should not borrow from its victim at a rate lower than its bank would charge. Which theories a regime permits is counsel's research; where discretion exists, the theory that best matches the actual financial facts of the parties is the one that argues itself.
More than their obscurity suggests, and the effect scales with how the losses arrived. A loss that occurred entirely at one moment has one natural accrual date. But most commercial losses accrue over time, monthly lost profits across several years, and the modeling choice is stark: interest on the full amount from the first date overstates the award, sometimes badly, while interest from the last date understates it symmetrically. The accurate treatment builds a schedule, each period's loss earning interest from that period forward, and the shortcut versions are exactly the kind of checkable error that rebuttal experts convert into credibility arguments. The same discipline applies to the seam at judgment: the components must map cleanly onto prejudgment and post-judgment regimes without a gap or an overlap at the boundary.
The gap becomes strategy, in both directions. A statutory rate above market makes prejudgment interest a valuable component of recovery and, for defendants, a quiet argument for earlier resolution, since every year of litigation accrues at the premium rate. A statutory rate below market undercompensates delay, and plaintiffs' teams sometimes explore whether the loss of use of funds can be framed within the damages themselves rather than left to the inadequate interest regime; whether any such framing is permissible for the claim is squarely counsel's question, and regimes differ on it. The economic contribution in either case is quantification: what the delay actually cost or actually earns under the governing rules, computed and on the table, because settlement leverage flows to the side that has done that arithmetic.
They are two halves of one time-value system, and inconsistency between them is a real and common defect. The award date is the pivot: losses after it are discounted back at some rate, and losses before it are carried forward at the interest rate, and the two rates embed views about time value and risk that should be reconcilable. A model that discounts future losses at a high risky rate while carrying past losses forward at a high interest rate, or that mixes real and nominal frames across the pivot, may be internally inconsistent in ways that produce a directional bias. The audit is straightforward: state both rates, state both frames, and confirm the treatment of each year of loss, past and future, follows one coherent view of time and risk. It is an afternoon of checking that prevents a deposition of explaining.
Describe the claim and its timeline. The Institute will help you see what the delay is actually worth under the candidate approaches.