Is There A Constitutional Right To 12% Interest?

Central bankers have been the bane of a saver's return for awhile now, but Wisconsin's court of appeals appears to have carved out a place for litigants to earn a market-beating return. In a decision issued by District II (written by Chief Judge Brown and joined by Judges Reilly and Gundrum), the court recently decided that it was unconstitutional for the legislature to change, retroactively, the rate of pre-judgment interest that applies to offers of settlement. Johnson v. Cintas Corp. No. 2, 13AP2323 (Wis. Ct. App. Jan. 14, 2015).

An "offer of settlement" is a statutory cost-shifting procedure in Wisconsin designed to encourage settlement. Under Wis. Stat. § 807.01, a party can serve an "offer of settlement" on an adverse party, and, if the offeree accepts within 10 days, the court enters judgment in the amount of the offer. The case is over. If the offeree does not accept, however, it makes that choice at its own peril, for the statute shifts litigation costs to