Maine: Prejudgment Interest Rules
The short answer
Yes, and it's the default outcome, not something a judge has to be persuaded to award. Maine's single prejudgment-interest statute, 14 M.R.S. § 1602-B, splits only by rate: a contract or note that states its own interest rate gets that rate; every other civil claim -- including a contract claim with no stated rate, and virtually all tort claims -- gets a floating rate set annually off the one-year U.S. Treasury bill yield plus 3 percentage points. Interest starts running from a sworn notice of claim served on the defendant, or from the date the complaint was filed if there was no earlier notice. It's mandatory by default, but a court can waive it in whole or in part for good cause. Small claims actions get none of it unless the underlying claim itself carries a contract rate.
| Governing law | A single statute governs prejudgment interest statewide: 14 M.R.S. § 1602-B, which splits only by rate mechanism -- subsection 2 for a contract or note that states its own interest rate, subsection 3 for every other civil action. A companion section, § 1602-C, sets postjudgment interest separately, and § 1602-B(6) expressly prevents prejudgment interest from compounding into the postjudgment base |
|---|---|
| Interest rate | For a contract or note that itself states an interest rate: that stated rate (§1602-B(2)). For every other civil action -- most personal-injury and other tort claims, and any contract claim without its own rate provision -- the one-year U.S. Treasury bill rate (the weekly average one-year constant-maturity Treasury yield for the last full week of the calendar year before the year interest begins to accrue) plus 3 percentage points (§1602-B(3)). Small claims actions draw no prejudgment interest at all unless the claim itself carries a contract or note rate (§1602-B(1)) |
| When interest starts running | From the time a sworn notice of claim was served on the defendant; if none was given, from the date the complaint was filed (§1602-B(5)). For a contract or note claim, the applicable rate itself is also locked in as of that same notice-or-filing date. A prevailing party's own request for a continuance longer than 30 days suspends the interest clock for the continuance period |
| Contract vs. tort claims | Not really a contract-vs-tort split. A claim founded on a contract or note that itself states an interest rate gets that stated rate; every other civil claim -- including a contract claim with no stated rate -- gets the identical floating statutory rate as a personal-injury or other tort claim. An unliquidated or rate-silent contract claim is treated exactly like a tort claim, not like a rate-bearing contract claim |
| Mandatory or discretionary | Mandatory by default -- the statute says interest 'is allowed,' not that a court may choose to allow it -- but with a narrow, express discretionary escape hatch: on the losing party's own petition and a showing of good cause, the trial court may fully or partially waive the interest otherwise due (§1602-B(5)) |
| Simple or compound | The statute doesn't label the prejudgment rate itself as simple or compound, but it does bar interest from compounding across the pre/post-judgment boundary: §1602-B(6) says prejudgment interest 'may not be added to the judgment amount in determining the sum upon which post-judgment interest accrues' -- postjudgment interest runs on the underlying judgment only, not on judgment-plus-already-accrued-prejudgment-interest |
| Claims against the government | Prejudgment interest against a Maine governmental entity or its employees isn't barred, but it's folded INSIDE the Maine Tort Claims Act's overall damages cap rather than sitting on top of it -- the opposite of some other states' approach. 14 M.R.S. § 8105(2) says 'court costs, prejudgment interest and all other costs that a court may assess must be included within the damage limit' (currently $400,000 per occurrence under §8105(1)), while 'accrued post-judgment interest may not be included within the damage limit' -- postjudgment interest is the one cost that sits outside the cap, not prejudgment interest. No punitive damages are allowed against a governmental entity at all (§8105(5)) |
| Other exceptions | Small-claims actions draw no prejudgment interest at all unless the claim is itself based on a contract or note with its own interest provision (§1602-B(1)) -- an outright category exclusion, not just a lower rate. The trial court's good-cause waiver power under §1602-B(5) is the one true discretionary override on an otherwise mandatory, formula-driven system |
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The short answer
Maine runs prejudgment interest off one clean statute, 14 M.R.S. § 1602-B, and the split isn't contract versus tort at all -- it's whether the underlying contract or note already states its own interest rate. If it does, that rate controls. If it doesn't -- and that covers virtually every tort claim along with any rate-silent contract claim -- interest runs at a floating rate set every year off the one-year Treasury bill yield, plus 3 percentage points. Interest starts from a sworn notice of claim served on the defendant, or from the date the complaint was filed if no earlier notice was given. It's the default outcome once damages are found, not something a plaintiff has to argue for, though a court can waive it for good cause shown. The one flat exclusion: small claims actions get no prejudgment interest unless the claim itself is grounded in a contract or note with its own rate.
Requirements one by one
Governing law
Everything runs through 14 M.R.S. § 1602-B, split into three short subsections by claim type: small claims (subsection 1), contract/note claims with their own stated rate (subsection 2), and everything else (subsection 3). A separate but related section, § 1602-C, governs interest AFTER judgment, using a different rate formula; § 1602-B(6) expressly cross-references it to make clear the two don't compound into each other.
Interest rate
Two tracks. If the claim is founded on a contract or note that itself contains an interest-rate provision, that stated rate is the prejudgment rate (§1602-B(2)) -- Maine just enforces the parties' own bargain here. For every other civil action, the rate is the one-year U.S. Treasury bill rate -- specifically, the weekly average one-year constant-maturity Treasury yield for the last full week of the calendar year immediately before the year interest begins to accrue -- plus 3 percentage points (§1602-B(3)). If the Federal Reserve ever stops publishing that particular Treasury yield, the statute directs the state's Supreme Judicial Court to set an annual replacement rate by rule. Small claims actions are carved out entirely unless the claim itself carries a contract-based rate (§1602-B(1)).
When interest starts running
Interest accrues "from the time of notice of claim setting forth under oath the cause of action, served personally or by registered or certified mail upon the defendant" -- and if no such notice was ever given, from the date the complaint was filed instead (§1602-B(5)). For a contract or note claim, the applicable rate itself is locked in as of that same notice-or-filing date, so a later change in market rates doesn't reset the number once the clock has started. One built-in pause: if the prevailing party requests and gets a continuance longer than 30 days, interest is suspended for as long as that continuance lasts.
Contract vs. tort claims
Maine's real dividing line isn't the claim's legal label, it's whether the underlying obligation already states an interest rate. A promissory note or a contract with its own interest clause gets that contract rate. Everything else -- a personal-injury claim, a wrongful-death claim, and just as importantly, a breach-of-contract claim that doesn't specify its own rate -- falls into the same catch-all bucket and draws the identical Treasury-plus-3% floating rate. So two different contract disputes can end up on different tracks depending on how the contract itself was drafted.
Mandatory or discretionary
Mandatory as the default rule -- the statute's language is "prejudgment interest is allowed," not permissive "may be allowed" -- but Maine builds in one explicit discretionary safety valve: on the losing party's own petition, and only on a showing of good cause, the trial court may order the interest "fully or partially waived" (§1602-B(5)). That's a narrower discretion than a state where the judge decides case by case whether to award interest at all; here, interest is the starting assumption, and the burden is on the party trying to escape it.
Simple or compound
Section 1602-B doesn't use the words "simple" or "compound" for the prejudgment rate itself, but it does address compounding at the pre/post-judgment boundary directly: §1602-B(6) states that prejudgment interest "may not be added to the judgment amount in determining the sum upon which post-judgment interest accrues." In practice, that means postjudgment interest is computed only on the underlying judgment amount, never on judgment-plus-already-accrued-prejudgment-interest -- a real, if narrow, anti-compounding rule built directly into the statute's text.
Claims against the government
Maine doesn't bar prejudgment interest against a governmental entity or its employees under the Maine Tort Claims Act, but it treats that interest differently than an ordinary civil judgment: 14 M.R.S. § 8105(2) requires that "court costs, prejudgment interest and all other costs that a court may assess must be included within the damage limit" set by the Act -- currently $400,000 per occurrence under §8105(1). In other words, prejudgment interest eats into the same capped pool as the underlying damages, rather than being added on top of it. The same subsection carves out one exception in the opposite direction: "accrued post-judgment interest may not be included within the damage limit," so postjudgment interest (unlike prejudgment interest) does sit outside the cap. No punitive or exemplary damages are allowed against a governmental entity at all (§8105(5)).
Other exceptions
The clearest categorical exclusion is small claims: §1602-B(1) denies prejudgment interest altogether in a small claims action unless the claim is itself based on a contract or note with its own rate provision -- there's no floating-rate fallback the way there is in ordinary civil actions. Beyond that, the good-cause waiver in §1602-B(5) is the statute's only real escape valve, letting a court reduce or eliminate interest that would otherwise be automatic.
What trips people up
The most common mistake is assuming Maine splits prejudgment interest by contract versus tort, the way many states do. It doesn't -- the actual dividing line is whether the underlying obligation states its own interest rate. A breach-of-contract claim on a rate-silent agreement gets the same Treasury-plus-3% rate as a personal-injury claim, not a different "contract rate."
The second trap is the notice-of-claim mechanism: because interest can start running from a sworn notice served on the defendant well before a lawsuit is even filed, failing to send that notice early can cost a plaintiff months or years of otherwise-recoverable interest, since the fallback accrual date is the (usually later) date the complaint was filed.
Common questions
Do I have to ask the court for prejudgment interest in Maine?
No -- it's the statutory default once damages are found. The one thing a losing party can do is petition the court to waive it in whole or in part, but only on a showing of good cause.
What rate applies to my breach-of-contract claim in Maine?
If your contract states its own interest rate, that rate applies. If it doesn't, you get the same floating rate as a tort claim: the one-year Treasury bill rate plus 3%, fixed as of when notice of claim was given or the complaint was filed.
Can I get prejudgment interest if I sue a Maine town or the state?
Yes, but it counts against the Maine Tort Claims Act's overall damages cap ($400,000 per occurrence) rather than being added on top of it -- unlike postjudgment interest, which sits outside that cap.
Does Maine's prejudgment interest compound?
The statute doesn't label the prejudgment rate itself simple or compound, but it does bar prejudgment interest from being folded into the principal for purposes of computing postjudgment interest.
Statutes and sources
- 14 M.R.S. § 1602-B(1)-(3) -- "In small claims actions, prejudgment interest is not recoverable unless the rate of interest is based on a contract or note... In all civil and small claims actions involving a contract or note that contains a provision relating to interest, prejudgment interest is allowed at the rate set forth in the contract or note... In civil actions other than those set forth in subsections 1 and 2, prejudgment interest is allowed at the one-year United States Treasury bill rate plus 3%." Accessed 2026-07-05: https://legislature.maine.gov/statutes/14/title14sec1602-B.html
- 14 M.R.S. § 1602-B(5) -- "Prejudgment interest accrues from the time of notice of claim setting forth under oath the cause of action, served personally or by registered or certified mail upon the defendant until the date on which an order of judgment is entered. If a notice of claim has not been given to the defendant, prejudgment interest accrues from the date on which the complaint is filed... On petition of the nonprevailing party and on a showing of good cause, the trial court may order that interest awarded by this section be fully or partially waived." Accessed 2026-07-05: https://legislature.maine.gov/statutes/14/title14sec1602-B.html
- 14 M.R.S. § 1602-B(6) -- "This section does not affect post-judgment interest imposed by section 1602-C. Prejudgment interest may not be added to the judgment amount in determining the sum upon which post-judgment interest accrues." Accessed 2026-07-05: https://legislature.maine.gov/statutes/14/title14sec1602-B.html
- 14 M.R.S. § 8105(1), (2), (5) -- "...the award of damages, including costs, against either a governmental entity or its employees, or both, may not exceed $400,000 for any and all claims arising out of a single occurrence... Court costs, prejudgment interest and all other costs that a court may assess must be included within the damage limit specified by this section. Accrued post-judgment interest may not be included within the damage limit... No judgment or award against a governmental entity shall include punitive or exemplary damages." Accessed 2026-07-05: https://legislature.maine.gov/statutes/14/title14sec8105.html
Source links
Every statute quoted above, linked, with the date we checked it.