H1795 would change the way Massachusetts calculates prejudgment interest in certain civil cases. Under current law, sections 6B and 6C of chapter 231 impose a fixed 12% annual prejudgment interest rate. This bill replaces that fixed rate with a variable rate tied to the weekly average one-year constant maturity Treasury yield published by the Federal Reserve for the calendar week before judgment is entered.
The measure applies to the statutory prejudgment interest provisions in chapter 231, which affect damages calculations in civil litigation. By linking the rate to a market-based Treasury benchmark, the bill would make prejudgment interest rise or fall with prevailing economic conditions rather than remain fixed at 12%, potentially changing the amount of interest awarded to plaintiffs and paid by defendants in cases covered by those sections.
Impact
If enacted, the bill would amend sections 6B and 6C of chapter 231 of the General Laws by removing the fixed 12% prejudgment interest rate and substituting a Treasury-yield-based formula. This would directly affect civil judgments where prejudgment interest is awarded, altering the financial exposure of litigants and the amount of compensation recovered for delayed payment. It would also require courts and practitioners to reference Federal Reserve data to determine the applicable rate for each judgment period.
Sentiment
There is limited recorded discussion or voting history for this filing, so the overall sentiment cannot be measured from committee debate or roll calls. The bill’s sponsorship and reintroduction of similar language from a prior session suggest continued interest in revising the prejudgment interest framework, likely reflecting concern that the current fixed 12% rate is outdated or disconnected from market conditions.
Contention
The main point of contention is likely the choice between a fixed statutory rate and a floating market-based rate. Supporters may view the current 12% rate as too high or too rigid in a changing interest-rate environment, while opponents may argue that a variable rate could reduce predictability for litigants and weaken the incentive to settle or promptly resolve claims. The affected parties are civil plaintiffs, defendants, insurers, and attorneys handling damages cases under sections 6B and 6C of chapter 231.