Keefe: Court Clarifies Post-Decision Interest

Thursday, March 1, 2018 | 0

I admit to being mildly surprised by this important ruling and I think our Illinois workers' compensation textbook might need updating.

Eugene Keefe

In Dobbs Tire & Auto v. IWCC, issued Feb. 16, the Illinois Appellate Court reviewed claims by two claimants who separately obtained decisions from arbitrators awarding significant workers’ compensation benefits. The first claimant received his award in January 2010, and the second received her award in March 2013.

Their respective employers appealed but were unable to obtain relief or any significant change from the Illinois Workers’ Compensation Commission, the circuit court or the Appellate Court. In such a setting, I have been teaching students and lawyers of my opinion that interest was due at the rate set by the arbitrator during the appeal from arbitration to the commission. After the commission ruled, judgment interest at 9% was then due.

I want all my readers and colleagues to understand the legal advice above was incorrect and should no longer be followed. It is difficult for me to admit I was incorrect, but let’s all update our handling and recommendations moving forward. I salute the august justices of the Appellate Court for this ruling that provides clarity on this topic that is important to all Illinois workers' compensation system participants.

In Dobbs, at the end of all appeals, the employers or their insurance carriers timely paid the final WC awards to both claimants, plus interest at the relatively low statutory rate set by the arbitrator. The first claimant’s employer attached interest of 0.11%, and the second employer attached interest of 0.13%, pursuant to Section 19(n) of the Workers’ Compensation Act. As I indicate above, that is a relatively low interest rate and is what the state Workers' Compensation Act provides.

Claimants both objected and filed motions under Section 19(g) of the act to enforce their final awards but adding a new claim for judgment interest at the much higher rate of 9% on the second half of the appeals, with the first claimant proceeding in the circuit court of Fayette County, and the second proceeding in the circuit court of St. Clair County.

The trial judge in Fayette County found the first claimant’s employer had fully satisfied her final award in a timely fashion and dismissed the complaint, but the trial judge in ultra-liberal St. Clair County ruled that the second claimant’s employer should have paid him interest from the date of the IWCC decision to the end of the claim at 9%.

The employer appealed. The first claimant separately appealed the dismissal of her complaint against her employer, but the Appellate Court consolidated her case with the appeal from the employer.

The Appellate Court explained the Illinois Code of Civil Procedure Section 2-1303 provides judgments recovered in any court will draw interest at a rate of 9% per year until satisfied. However, Section 19(n) of the Workers’ Compensation Act provides that IWCC decisions reviewing an arbitrator’s award “shall draw interest at a rate equal to the yield on indebtedness issued by the United States government with a 26-week maturity next previously auctioned on the day on which the decision is filed.”

This interest, which I characterize as “post-arbitration interest,” is, per statute, “drawn from the date of the arbitrator’s award on all accrued compensation due the employee through the day prior to the date of payments.”

The Appellate Court ruling explained that an injured worker becomes eligible for interest under Section 2-1303 of our Civil Code only “if and when the arbitrator’s award or commission’s decision becomes an enforceable judgment” because the employer failed to pay any benefits due.

An employer that makes payment of an award, accrued installments and Section 19(n) interest before the injured worker files a motion to enforce will not be subject to interest under Section 2-1303, the court said.

Since both employers tendered payment of what was owed to both claimants before they filed motions for enforcement, the Appellate Court ruled the circuit court of Fayette County did not err in refusing to award interest to the first claimant pursuant to Section 2-1303, but the circuit court of St. Clair County erred in awarding such interest to the second claimant.

Please update your handling instructions to reflect the clarity provided in this decision.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted, with permission, from the firm's client newsletter.