Florida: Prejudgment Interest Rules

The short answer

Florida doesn't split prejudgment interest into a "contract" bucket and a
"tort" bucket the way many states do. Instead, Florida courts ask one
question: can the plaintiff's pecuniary loss be pinned to a specific date?
If so, prejudgment interest is owed as a matter of law — not something a
jury weighs or a judge grants as a favor — at the same floating rate used
for interest on judgments generally, running all the way back to that loss
date. This approach, called the "loss theory," comes almost entirely from
case law rather than a dedicated statute; the legislature only ever wrote
the rate itself into law.

Requirements one by one

Governing law

Florida has no standalone prejudgment-interest statute. The rate mechanism
lives in Fla. Stat. § 55.03 (interest on judgments generally) and
§ 687.01 (which points any interest owed "without a special contract for
the rate thereof" back to § 55.03's rate). The actual RIGHT to prejudgment
interest — as opposed to just its rate — comes from the Florida Supreme
Court's decision in Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212
(Fla. 1985), which adopted the "loss theory": prejudgment interest is
"merely another element of pecuniary damages," owed as of right once a
loss is fixed as of a date certain, whether the underlying claim sounds in
contract or in tort.

Interest rate

The default rate is whatever the Chief Financial Officer has set under
§ 55.03: a figure recalculated every quarter by averaging the Federal
Reserve Bank of New York's discount rate over the prior 12 months and
adding 400 basis points (4 percentage points). That rate locks in at the
moment a judgment is entered, then adjusts once a year on January 1 (not
every quarter) until the judgment is paid in full. If the parties' own
written contract states a different interest rate, that rate controls
instead — § 55.03(1) says the statutory scheme doesn't "affect a rate of
interest established by written contract or obligation," and § 687.01
only fills the gap when there's no such contract rate.

When interest starts running

Interest starts on "the date of that loss" — not necessarily the date of a
breach, an injury, or the filing of suit. In a contract case this is
usually straightforward: the date payment became due. In other cases,
Florida courts have split over exactly how to pin down that date — some
opinions have tied it to a specific triggering event (like the date a
condominium was turned over to unit owners), while others have rejected an
earlier or later date the evidence doesn't actually support and used the
date the pecuniary loss was realized instead. If no fixed loss date can be
shown from the evidence at all, several district courts of appeal have
defaulted to the date of the verdict.

Contract vs. tort claims

This is where Florida is a real outlier. Rather than a hard rule that
contract claims are treated one way and tort claims another, the loss
theory applies equally to both: "[i]n all cases, either of tort or
contract, where the loss is wholly pecuniary, and may be fixed as of a
definite time, interest should be allowed as a matter of right, whether the
loss is liquidated or unliquidated." The practical dividing line isn't the
legal theory of the claim — it's whether the loss is purely economic and
tied to an ascertainable date. That's why a straightforward property-
damage or breach-of-contract claim almost always qualifies, while a
personal-injury claim for pain and suffering, which has no fixed dollar
value at a specific past moment, generally does not.

Mandatory or discretionary

Mandatory, not discretionary, once the loss-date condition is met.
Argonaut explicitly rejected an older approach ("the penalty theory")
that treated prejudgment interest as a jury-decided remedy for a
defendant's wrongful refusal to pay; once a verdict fixes damages as of a
date certain, adding interest is described as "a purely ministerial duty"
of the clerk, not a fact question for the jury to weigh.

Simple or compound

Simple interest only. Nothing in § 55.03 or § 687.01 authorizes
compounding, and Florida practice computes interest as a straight daily
rate against the principal, not against principal-plus-accrued-interest.

Claims against the government

A government entity isn't categorically exempt from prejudgment interest.
In Broward County v. Finlayson, 555 So.2d 1211 (Fla. 1990), the Florida
Supreme Court held a county liable for prejudgment interest on a class of
employees' back-pay judgment — but it adjusted the accrual date on
equitable grounds to the date the county first received notice of the
claim (a formal grievance), rather than the earlier date the underlying
unpaid wages actually accrued. That's a real, if narrow, difference in how
the loss-date question gets answered against a government defendant.

Other exceptions

Damages that can't be fixed as of a definite date — most notably future
damages and non-economic personal-injury damages like pain and suffering —
fall outside the loss theory entirely and don't earn prejudgment interest.
Florida courts have also recognized a narrow equitable exception that can
deny prejudgment interest altogether "based on considerations of
fairness," though appellate decisions caution against using either that
exception or the loss theory itself to hand either side a windfall.

What trips people up

The single biggest trap is assuming Florida splits contract and tort like
most other states. It doesn't. The dividing line is whether the loss has a
fixed dollar amount tied to a specific date, not what kind of claim it is
— which is exactly why some tort claims (a fixed property-damage loss) get
prejudgment interest and some contract-adjacent claims (a jury verdict with
no identifiable loss date) don't.

The rate is a moving target that gets "frozen" at an odd moment. Because
§ 55.03(3) locks in the rate that's in effect when judgment is entered and
then only re-adjusts once a year afterward — not every quarter, even though
the Chief Financial Officer publishes new quarterly numbers — the rate on
a years-old unpaid judgment can differ noticeably from whatever the
current-quarter published rate happens to be when someone looks it up.

Identifying "the date of loss" is often the hardest-fought issue in the
whole calculation, especially in construction-defect and other slow-
developing-harm cases. Florida's district courts of appeal have not always
agreed on how to pick that date, and a party who assumes the clock starts
at the date of breach (rather than the date the loss was actually
realized) can end up demanding interest for a period the evidence doesn't
support.

Common questions

Does Florida treat a breach-of-contract claim differently from a
personal-injury claim for prejudgment interest?
Not by the type of claim itself — the same "loss theory" test applies to
both. What matters is whether the loss is purely economic and can be
pinned to a specific date; a contract claim usually can, while a
personal-injury claim for pain and suffering usually cannot.

What interest rate applies if my contract doesn't say?
The statutory rate set quarterly by the Chief Financial Officer under
§ 55.03 — a figure tied to the Federal Reserve Bank of New York's discount
rate plus 400 basis points, locked in at the date of judgment and adjusted
once a year after that.

Does Florida prejudgment interest compound?
No. It's simple interest calculated against the principal only.

Can I get prejudgment interest against a county or other government
entity?
Generally yes, under the same loss-theory rule that applies to private
defendants, though courts have sometimes adjusted the exact start date on
fairness grounds in a government back-pay dispute.

Statutes and sources

• Fla. Stat. § 55.03(1) — "On December 1, March 1, June 1, and September 1
  of each year, the Chief Financial Officer shall set the rate of interest
  that shall be payable on judgments or decrees for the calendar quarter
  beginning January 1 and adjust the rate quarterly on April 1, July 1,
  and October 1 by averaging the discount rate of the Federal Reserve Bank
  of New York for the preceding 12 months, then adding 400 basis points to
  the averaged federal discount rate. ... Nothing contained herein shall
  affect a rate of interest established by written contract or
  obligation." Accessed 2026-07-05:
  https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0055/Sections/0055.03.html
• Fla. Stat. § 55.03(3) — "The interest rate is established at the time a
  judgment is obtained and such interest rate shall be adjusted annually
  on January 1 of each year in accordance with the interest rate in effect
  on that date as set by the Chief Financial Officer until the judgment is
  paid...." Accessed 2026-07-05: same URL as above.
• Fla. Stat. § 687.01 — "In all cases where interest shall accrue without
  a special contract for the rate thereof, the rate is the rate provided
  for in s. 55.03." Accessed 2026-07-05:
  https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0687/Sections/0687.01.html
• Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212, 215 (Fla. 1985) —
  established the "loss theory": "when a verdict liquidates damages on a
  plaintiff's out-of-pocket, pecuniary losses, plaintiff is entitled, as a
  matter of law, to prejudgment interest at the statutory rate from the
  date of that loss."
• Bosem v. Musa Holdings, Inc., 46 So.3d 42, 46 (Fla. 2010) — confirms
  the loss theory applies "in contract actions, and in certain tort
  cases," once damages are determined.
• Broward County v. Finlayson, 555 So.2d 1211 (Fla. 1990) — held a
  county liable for prejudgment interest on a back-pay judgment, but fixed
  the accrual date at the date the county received the first notice of
  the claim rather than the date the underlying wages accrued. Opinion
  text confirmed via law.justia.com.