Prejudgment Interest Rules in Maine
At a glance
| Governing law | 14 M.R.S. § 1602-B governs prejudgment interest in civil and small claims actions; § 1602-C governs postjudgment interest separately. |
|---|---|
| Interest rate | A contract or note containing an interest provision uses its stated rate (§ 1602-B(2)); other civil actions use the one-year U.S. Treasury bill rate plus 3 points (§ 1602-B(3)). Small claims have no prejudgment interest unless based on a contract or note rate (§ 1602-B(1)). |
| When interest starts running | From a sworn notice of claim served personally or by registered/certified mail; absent notice, from complaint filing. A prevailing party’s requested continuance longer than 30 days suspends interest during that continuance (§ 1602-B(5)). |
| Contract vs. tort claims | A rate-bearing contract or note follows § 1602-B(2); other civil claims, including rate-silent contracts and tort claims, follow the Treasury-plus-3-point formula in § 1602-B(3). |
| Mandatory or discretionary | Interest is allowed under § 1602-B(2)-(3), but on the losing party’s petition and good cause the court may waive it fully or partly (§ 1602-B(5)). |
| Simple or compound | Section 1602-B does not prescribe periodic prejudgment compounding; subsection (6) expressly prevents accrued prejudgment interest from being added to the base for postjudgment interest. |
| Claims against the government | Under the Maine Tort Claims Act, damages and costs against a governmental entity or employee are capped at $400,000 per occurrence (§ 8105(1)); prejudgment interest is inside that limit, while accrued postjudgment interest is outside (§ 8105(2)). |
| Other exceptions | Small claims cannot recover prejudgment interest without a contract or note rate (§ 1602-B(1)); a court may waive interest on petition and good cause (§ 1602-B(5)). |
Requirements one by one
Governing law
Title 14, § 1602-B gives the prejudgment rules. Section 1602-C separately provides a postjudgment rate; § 1602-B(6) specifies how the two phases interact.
Interest rate
A contract or note with an interest provision supplies its own rate (§ 1602-B(2)). Other civil actions use the one-year U.S. Treasury bill rate plus three points (§ 1602-B(3)). The statute defines the reference as the weekly average one-year constant-maturity Treasury yield for the last full week of the prior calendar year.
When interest starts running
Under § 1602-B(5), a sworn notice of claim starts interest when served personally or by registered or certified mail. If there was no such notice, filing the complaint starts it. A prevailing party who obtains a continuance longer than 30 days stops the interest clock for that continuance.
Contract vs. tort claims
The statute sorts claims by whether a contract or note already contains an interest provision. Rate-silent contract claims and tort claims use the same catchall rate in § 1602-B(3).
Mandatory or discretionary
Sections 1602-B(2)-(3) say interest is allowed. Subsection (5) lets the court waive it fully or partly on the nonprevailing party's petition and a showing of good cause.
Simple or compound
Section 1602-B(6) prevents accrued prejudgment interest from being added to the judgment amount used to calculate postjudgment interest. The section does not say that prejudgment interest periodically compounds.
Claims against the government
For claims permitted by the Maine Tort Claims Act, § 8105(1) caps damages and costs at $400,000 for one occurrence. Subsection (2) expressly includes prejudgment interest inside that limit and excludes accrued postjudgment interest from it.
What trips people up
The sworn notice must be served by one of the methods in § 1602-B(5); otherwise the complaint filing date starts interest. Small claims are excluded unless a contract or note supplies an interest rate (§ 1602-B(1)).
Common questions
Can the court waive prejudgment interest? Yes. On the losing party's petition and a showing of good cause, § 1602-B(5) permits full or partial waiver.
Does prejudgment interest earn postjudgment interest? No. Section 1602-B(6) excludes it from the postjudgment interest base.
Statutes and sources
- 14 M.R.S. § 1602-B(1)-(3) — https://legislature.maine.gov/statutes/14/title14sec1602-B.html (accessed 2026-10-06).
- 14 M.R.S. § 1602-B(5) — https://legislature.maine.gov/statutes/14/title14sec1602-B.html (accessed 2026-10-06).
- 14 M.R.S. § 1602-B(6) — https://legislature.maine.gov/statutes/14/title14sec1602-B.html (accessed 2026-10-06).
- 14 M.R.S. § 8105(1), (2), (5) — https://legislature.maine.gov/statutes/14/title14sec8105.html (accessed 2026-10-06).
- 14 M.R.S. § 1602-C(1) — https://legislature.maine.gov/statutes/14/title14sec1602-C.html (accessed 2026-10-06).
Source links
Every statute quoted above, linked, with the date we checked it.
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