Is State Court A Better Investment than Federal Court?
A plaintiff who is owed money by a defendant often laments that it gets wronged twice – by the failure to pay in the first instance and by the subsequent delay in paying the money through litigation. The judicial system recognizes the impact caused by the delay and awards a plaintiff interest upon a successful judgment. The amount of the interest, however, varies depending on what court system the parties are in.
Massachusetts state courts currently award a successful plaintiff 12% interest. Federal courts, on the other hand, award interest based on certain market benchmarks that are historically much lower than the state interest award. Whether to file in state or federal court can be a complex decision that takes into account many factors. The potential interest award should be one of those factors as the same principal judgment can ultimately be higher in Massachusetts state court than federal court.
- By Joe Calandrelli