Recognizing that state courts haven’t always followed the law in awarding interest, the Massachusetts Appeals Court weighed in on when the prejudgment interest clock started ticking for a $2.5 million judgment against Lloyd’s of London.
The Massachusetts appellate panel concluded last week that a portion of the prejudgment interest in a dispute between an insurer and policyholder should be recalculated from April 27, 2021, to July 3, 2018—adding an additional $800,000 onto Lloyd’s bill. The policyholder and insurer disputed when the prejudgment interest started accruing. The plaintiff, PeoplesBank, argued interest should be calculated from July 2018, the “date of the breach,” when Lloyd’s wrongfully denied coverage. On the contrary, Lloyd looked to a provision that the global insurance company would pay any covered losses within 30 days of reaching an agreement, marking the April 2021 date as when the parties initially agreed to $2.274 million in damages.