1. What is Prejudgment Interest in Ontario?

Prejudgment interest in Ontario is compensation awarded to a plaintiff for the loss of use of money that was rightfully theirs during the period between when a cause of action arose and the date of judgment. It's governed by the Courts of Justice Act in Ontario.

2. How Does the Calculator Work?

The calculator uses the prejudgment interest formula:

Where:

• \( Principal \) — The original amount of money ($)
• \( Rate \) — The prejudgment interest rate (decimal)
• \( Days \) — The number of days between the cause of action and judgment

Explanation: This formula calculates simple interest for the period between when the cause of action arose and the date of judgment.

3. Importance of Prejudgment Interest Calculation

Details: Accurate prejudgment interest calculation is crucial for ensuring proper compensation in legal proceedings. It accounts for the time value of money and helps make the plaintiff whole for the period they were deprived of funds.

4. Using the Calculator

Tips: Enter the principal amount in dollars, the prejudgment interest rate as a decimal (e.g., 0.05 for 5%), and the number of days between the cause of action and judgment. All values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current prejudgment interest rate in Ontario?
A: The prejudgment interest rate in Ontario is set by the Courts of Justice Act and may change periodically. Check the Ontario Courts website for the current rate.

Q2: Are there exceptions to prejudgment interest in Ontario?
A: Yes, courts have discretion to award no interest or a different rate in certain circumstances, such as when there's unreasonable delay by the plaintiff.

Q3: How is the period calculated for prejudgment interest?
A: The period typically runs from the date the cause of action arose to the date of judgment, excluding any periods of delay attributable to the plaintiff.

Q4: Does prejudgment interest compound?
A: Generally, prejudgment interest in Ontario is calculated as simple interest, not compound interest, unless specifically ordered by the court.

Q5: Is prejudgment interest taxable?
A: Prejudgment interest is generally taxable as income in the year it is received. Consult a tax professional for specific advice.