In Massachusetts, if you get a judgment against a Defendant in a lawsuit – or if someone gets a judgment against you – that’s not the end of the story in terms of what the party who won the suit can recover.
Importantly, beware of pre-judgment interest. A Massachusetts statute, M.G.L. Chapter 231, Section 6B, provides that a plaintiff who prevails in a personal injury action automatically receives 12 percent per year in interest on top of the award, with the amount calculated from the date the complaint is filed. The 12 percent is automatically added by the court clerk after the judgment is entered by the judge.
Let’s say a complaint was filed on June 1, 2019. Two years later, on June 1, 2021, a judgment in the amount of $200,000 is entered against the Defendant. The clerk would automatically add $24,000 to the award. Thus, the Plaintiff gets a judgment in the total sum of $240,000.
A similar statute, M.G.L. Chapter 231, Section 6B, applies to breach of contract actions, and again adds pre-judgment interest to the tune of 12 percent per year. However, in this kind of action, the is added from the “date of the breach or demand.” Thus, the date on which the contract was breached – or the date on which the Plaintiff made a demand for payment – is when the clock starts to run.
Let’s again say that the Complaint – this time alleging breach of contract – is filed on June 1, 2019. But in this case, let’s say the contractual breach occurred on June 1, 2018. Assuming the judgment enters against the Defendant on June 1, 2021, a full three years of interest is going to be added, amounting to additional $36,000. (The interest does not compound.)
As you can see, the Massachusetts statutes which allow for the automatic adding of pre-judgment interest can have a huge impact. It’s important for you and your attorney to be fully aware of such matters.
