§ 41.007.Prejudgment Interest

Twelve words with a clear rationale: prejudgment interest may not be assessed or recovered on an award of exemplary damages.

Prejudgment interest compensates for the delay in being paid. A plaintiff whose economic loss occurred three years before judgment has been deprived of that money in the meantime, and interest restores the time value of it.

Exemplary damages compensate for nothing. They punish the defendant and deter others, and no plaintiff was deprived of them at any earlier date — they did not exist until the jury awarded them.

So there is nothing for prejudgment interest to restore, and adding it would increase the punishment by an amount determined by how long the case took.

The prohibition is doubled — the award may not be assessed and may not be recovered — which closes the argument that interest could be calculated into a figure without being separately awarded.

Postjudgment interest is a different matter and is unaffected. Once judgment is entered the defendant owes a fixed sum, and interest on an unpaid judgment runs on exemplary damages as on anything else.

The section also matters for the damages cap. That provision limits exemplary damages by a formula tied to economic and noneconomic damages, and prejudgment interest on the compensatory award is not itself exemplary damages — so this section does not disturb interest running on the compensatory side.

The Medicare subrogation interest provision at the end of the chapter deals with a narrow and unrelated interest question.