Prejudgement Interest

Prejudgement Interest - Monetary compensation for the lost use of funds during the time that elapses between the date of an injury and the receipt of an award to compensate for that injury.(1)

Some jurisdictions do not allow the application of prejudgement interest.

 Application to Forensic Economics 

Prejudgement interest is neccessary because during the period of time after the injury but before payment is made, the defendant had access to the funds that should have been the plaintiffs and was not paying interest to borrow said funds. If prejudgement interest is not applied, the plaintiff is unduly disadvantaged while the defendant is unduly benefited (1).

(1) Source: Prejudgement Interest: The Long and the Short of It. Robert L Losey, Michael Mass and Jingsan Li. Journal of Forensic Economics 15(1), 2002, pp. 57.