Bill 41: What is Changing About Pre-Judgement Interest?

When you win a Personal Injury lawsuit, you will generally receive monetary damages. There are different types of damages or “heads” of damages, such as those to pay for pain and suffering or lost wages. In a Personal Injury Lawsuit, the successful party is usually entitled to have interest added to the money awarded by the Court. Pre-judgment interest is additional money that the Court awards based on the interest that the judgement would have earned from the period that passes between the start of the lawsuit to its conclusion.

Why Does Pre-Judgement Interest Matter?

Pre-judgment interest can be used as a helpful tool to motivate defendants to settle a case promptly without the added expense of going to trial. As an illustrative example, if a Personal Injury claim was valued at $100,000 and the interest rate was 5% per year compounding annually, after 5 years the interest alone would be just over $27,600.

Albertans have the right to claim interest on their damages, however, the amount of interest that Albertans can claim for a Motor Vehicle Accident is set by statute. The Courts have the discretion to change the amount of interest awarded (up or down) if the Courts find that one of the parties is behaving unreasonably in order to avoid prompt or fair resolution.

What is Bill 41 Changing?

In Alberta, Bill 41: the Insurance (Enhancing Driver Affordability and Care) Amendment Act, 2020 made a number of substantial changes to the injury compensation scheme in Alberta regarding claims that result from motor vehicle accidents.

Prior to Bill 41, prejudgment interest rates were set at 4% per year from the date of the accident to the date the claim was settled on general (non-pecuniary) damages (i.e., damages for pain and suffering). Special (pecuniary) damages (e.g., damages for lost wages) accrued interest according to the rates set in the Judgement Interest Regulation.

Bill 41 changes this in two important ways. First, under the new rules, both general and special damages would be calculated based on the rates set in the Regulation, instead of separate rates for each type of damage. The rate has been for 2022 at 0.2%. Secondly, the interest would accrue in the earlier of either:

The statement of claim being served on the defendant, or
Written notice of the plaintiff’s intention to make a claim for loss or damage provided to the defendant’s insurance company

Fair Alberta Injury Regulations (FAIR AB) has created this helpful calculator to explain the difference between pre-Bill 41 and post-Bill 41 realities.

What Should I Do About Pre-Judgement Interest Changes?

Given this rule change, it is more advantageous to a plaintiff (the injured, not at fault, party) to inform the defendant’s insurance company of their intent to bring a claim as soon as possible. Failing to do so can result in hundreds or even thousands of dollars being left on the table if the plaintiff waits until the limitation date (usually two years following the date of the accident).

If you or a loved one has been injured in a serious accident, seek medical attention immediately. Even if your injuries appear “minor,” it is still essential to receive professional diagnosis and treatment as soon as possible. Timely medical care can both prevent serious long-term implications and strengthen your legal case.

Next, contact your own insurance company. Every Albertan driver is entitled to certain no-fault or Section B benefits. These benefits not only provide you with coverage for immediate medical expenses (like physiotherapy or massage therapy treatments) but the medical records generated from attending those treatments will assist you in establishing the extent of your injuries, which in turn impacts the value of your claim.

As with any serious injury, documentation will be key to making a strong case and attaining justice. Document every change you or your loved one experiences as a result of your accident. Things like damage to your vehicle, lost days of work, out-of-pocket expenses for medications or gas, and other factors will all contribute to your settlement. Serious accidents can take a long time to be resolved. Be sure to save receipts and keep a journal covering any charges or expenses incurred because of the accident. No detail is too minor; the more information you have, the stronger your case will be.

A Team You Can Trust

Since 1993, James H. Brown and Associates has built its reputation on award-winning service and proven results. When you work with us, you’re working with a proven team of experienced injury lawyers dedicated to standing up for your rights.

Our team also includes engineers, analysts, and other professionals here to support your case and provide care through every phase of the legal process and your recovery. From understanding the long-term impact of your injuries to helping you navigate the road to recovery, you can count on James H. Brown and Associates for care and support every step of the way.

Unrivalled Results

Results matter when it comes to serious injuries. When you’re pursuing legal action after an accident, nothing is more important than securing compensation for your short and long-term needs.

James H. Brown and Associates has proudly helped clients in Edmonton and across Alberta secure comprehensive settlements for their injuries, including numerous precedent-setting cases that continue to set the standard in Alberta injury law. Today, our team is ready to keep fighting for the rights of injured Edmontonians and helping them move forward after a serious accident.

Have You or a Loved One Been Injured?

With over 250 years’ combined injury law experience, James H. Brown and Associates are dedicated to serving the Edmonton area by supporting accident victims through every phase, from making a claim and navigating the courts to managing care and long-term treatment.