What to know: a winning plaintiff will usually recover interest from the date the debt came due. But, not always. Equitable considerations can result in the complete denial of prejudgment interest.

The general rule is that prejudgment interest is simply another element of a plaintiff’s damages that is awarded to make the plaintiff whole. If payment is due to a contractor on July 1, 2014, but payment is not made until December 30, 2017, then the contractor has been denied the use of that money for all that time, and the law says that the contractor should be paid for the loss of use of that money. The general rule is to allow a plaintiff to recover interest from the date the payment became due. Argonaut Insurance Co. v. May Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985). Unless the parties’ agreement establishes the interest rate to be applied, it will be calculated at a statutorily prescribed rate.

As with most rules, there are exceptions to this one, too. Under Florida law, “Interest is not recovered according to a rigid theory of compensation for money withheld, but is given in response to considerations of fairness.” Broward Cty. v. Finlayson, 555 So. 2d 1211, 1213 (Fla. 1990) (internal punctuation removed). So, trial courts are under an obligation to consider arguments for the reduction or complete denial of interest that generally would be awardable under the general rule or even to deny all recovery of interest. Leila Corporation of St. Pete v. Ossi, 2017 WL 3089659 (Fla. 2d DCA July 21, 2017). This has been referred to as an equitable reduction of prejudgment interest.

So, what “considerations of fairness” might result in a reduction or denial of prejudgment interest? One example occurred in a case of a government employee’s recovery against the government. There, the Florida Supreme Court reasoned that between two innocent victims – on the one hand, the employee who recovered back-pay from the government and, on the other, the citizens who would have to pay the interest if judgment was entered requiring the government to pay it – that it “would be grossly inequitable to make the citizens of Florida also pay interest.” Flack v. Graham, 461 So. 2d 82, 84 (Fla. 1984). As a result, the government employee who won a judgment for back pay did not recover interest.

Generally, a plaintiff who wins can expect that interest will be awarded. However, every plaintiff must be prepared to continue the battle, which will take place after trial, to obtain an award of prejudgment interest.

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