Award of Prejudgment Interest

An award of prejudgment interest is the rule rather than the exception in admiralty.[i]  Pre-judgment interest customarily is allowed in maritime tort cases, and is granted in the absence of exceptional circumstances.[ii]   Admiralty cases in which both parties are at fault, and both parties are damaged, often create an exceptional circumstance.  When two vessels are damaged and there is mutual fault, it is not clear until ascertained by the court which party is owed the greater amount of damages.  Although prejudgment interest is not usually awarded in mutual fault collision cases, a district court might nonetheless award it in the exercise of its discretion if the party to whom it is awarded is only slightly at fault, in order to ameliorate the harshness of the equal division of damages rule.[iii]  Neither a good-faith dispute over liability nor the existence of mutual fault justifies the denial of prejudgment interest in an admiralty case, because such cases are not extraordinary circumstances.  Moreover, prejudgment interest is merely an element of just compensation and is not warded as a penalty.

The ability to award prejudgment interest may be modified by federal statute.  When there is a conflict between the statute and the ability to award prejudgment interest, the statutory prohibition may control.


[i] Hawkins Sandblasting v. Jacksonville Shipyards, 668 So. 2d 1042 (Fla. Dist. Ct. App. 1st Dist. 1996)

[ii] International Ore & Fertilizer Corp. v. SGS Control Servs., 828 F. Supp. 1098, 1103 (S.D.N.Y. 1993)

[iii] Iberian Tankers Co. v. Gates Constr. Corp., 504 F.2d 747 (2d Cir. N.Y. 1974)


Inside Award of Prejudgment Interest