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House circles HB 91 after extended debate on prejudgment interest rate
Summary
Lawmakers debated HB 91, a bill to clarify prejudgment interest language and replace a 10% fixed rate with a variable market rate capped between 5% and 10%; members raised concerns about effects on litigation incentives and the bill was circled for amendment and later consideration.
SALT LAKE CITY — The Utah House on Feb. 24 debated House Bill 91, which would clarify statutory language governing prejudgment interest and change the default rate from a fixed 10% to a variable, market‑based rate subject to a 5%–10% floor and ceiling. Sponsors said the change modernizes an interest rate last set in 1982; critics warned it may encourage more litigation by softening the settlement incentive.
Representative Paul, presenting the bill, said courts have asked for statutory clarity on which cases the default interest rule applies to and that a market‑based rate is more realistic than a fixed 10% set decades ago. "The compromise the committee came to is that it will not be lower than 5% or higher than 10%," Paul said.
Several members opposed the rate change on policy grounds. Representative McKell said lowering the interest rate could encourage more litigation and impede settlement. Representative King emphasized that the default rate applies in cases where a contract does not specify interest and that 10% provides a useful settlement incentive.
Following a lengthy floor debate, the sponsor moved to circle HB 91 to allow time for amendments and further work; the motion to circle passed and the bill will be revisited with possible amendments.
Next steps: HB 91 was circled for later consideration; proponents invited colleagues to propose amendments to set the precise rate and clarify scope.
