Ohio: Prejudgment Interest Rules
The short answer
Ohio funnels both contract and tort claims through one statute, R.C. 1343.03, but the two tracks work almost oppositely. A contract creditor gets interest automatically once money becomes due, at a floating rate reset every year (7% for 2026). A tort plaintiff gets nothing until a court holds a separate hearing AFTER the verdict and specifically finds that the defendant failed to negotiate the case in good faith while the plaintiff did not -- only then does interest attach, and it can run all the way back to when the claim accrued. Claims against the state skip this statute entirely and run through a more forgiving, dedicated Court of Claims rule instead.
| Governing law | Both contract and tort run through ONE statute, R.C. 1343.03, unlike most states in this survey -- but its subsections split sharply: (A) covers contract and other written-instrument debts, (C) covers tort judgments; claims against the state instead use the Court of Claims Act, R.C. 2743.18 |
|---|---|
| Interest rate | One floating rate applies to both tracks: the July federal short-term rate (rounded to the nearest whole percent) plus 3%, recertified annually by the Tax Commissioner under R.C. 5703.47 -- 7%/yr for calendar year 2026; a written contract can set a different rate instead |
| When interest starts running | Contract: from the date the money became due and payable, at whichever rate was in effect during each calendar year until judgment. Tort: only accrues at all if a court holds a post-verdict good-faith hearing and rules for the plaintiff -- then from the date the claim accrued (if liability was admitted or the harm was intentional) or from the later of first insurer notice or the complaint's filing date in other cases |
| Contract vs. tort claims | Same statute, opposite mechanics: a contract creditor gets interest automatically once money is due; a tort plaintiff gets nothing unless the court holds a separate post-verdict hearing and finds the defendant failed to negotiate in good faith while the plaintiff did not (R.C. 1343.03(C), applying the four-factor test from Kalain v. Smith) |
| Mandatory or discretionary | Contract: mandatory once money becomes due under a qualifying instrument or transaction. Tort: entirely conditioned on the court's discretionary post-verdict finding on the good-faith-to-settle question, reviewed only for abuse of discretion |
| Simple or compound | No compounding language in the statute; interest is a simple annual rate, and a multi-year contract claim can accrue at a DIFFERENT rate for each calendar year since R.C. 5703.47 resets the rate annually rather than fixing one rate for the whole case |
| Claims against the government | Claims against the state use a separate statute, R.C. 2743.18, not § 1343.03 directly: prejudgment interest is mandatory ('shall be allowed') for the same period and rate as a private-party suit, and the Ohio Supreme Court has held this reaches even a contract sum 'not capable of ascertainment until determined by the court' -- a more forgiving standard than an ordinary private-party contract claim faces; the court's only discretion is to deny interest for delay the claimant itself caused |
| Other exceptions | R.C. 1343.03(C)'s tort-interest mechanism excludes future damages from the interest base entirely; § 1343.03(D) exempts claims under Ohio's workers' compensation chapter and any judgment where a different interest period is specified by other law |
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The short answer
Ohio uses a single statute, R.C. 1343.03, to answer this question for both contract and tort claims — but the two halves of that statute work almost opposite to each other. A creditor owed money on a contract, a note, or a similar transaction gets interest automatically once the money is due, at a rate that resets every year. A tort plaintiff gets none of that automatically at all: interest only attaches if, after the verdict, a party asks the court to hold a hearing and the court finds the party who has to pay failed to negotiate the case in good faith while the party who's owed the money did not. Claims against the State of Ohio itself skip this statute and use a separate, more forgiving Court of Claims rule instead.
Requirements one by one
Governing law
Ohio's prejudgment interest rule for contract and other written-instrument debts lives in R.C. 1343.03(A): a general provision covering "any bond, bill, note, or other instrument of writing," book accounts, settlements, and verbal contracts. Tort judgments are governed by a different subsection of the same statute, R.C. 1343.03(C), added specifically to give courts a mechanism for awarding interest in cases "based on tortious conduct." A civil action against the state itself skips R.C. 1343.03 entirely: R.C. 1343.03(D) expressly carves out actions "against the state in the court of claims," which instead run through the Court of Claims Act's own prejudgment interest provision, R.C. 2743.18.
Interest rate
Both the contract track and the tort track use the same floating rate: the federal short-term rate for July of a given year, rounded to the nearest whole percentage point, plus three percentage points, recertified by the Ohio Tax Commissioner under R.C. 5703.47 by October 15 of each year for the following calendar year. That rate was 7% for calendar year 2026. A written contract can override the default rate by specifying its own — in that case the creditor gets the contract rate instead of the statutory one.
When interest starts running
For a contract debt, interest starts running from the date the money "becomes due and payable" — not the date the instrument was signed — and runs at whatever rate under R.C. 5703.47 was in effect for each calendar year the case was pending, meaning a case spanning several years can accrue interest at a different rate for each year. For a tort claim, interest doesn't start running at all unless the post-verdict good-faith hearing produces a finding for the plaintiff; if it does, interest runs either from the date the cause of action accrued (if the defendant admitted liability or acted with deliberate intent to harm) or, in every other case, from the later of the date the plaintiff gave the defendant's insurer first notice of the claim or the date the plaintiff's pleading was filed.
Contract vs. tort claims
Ohio treats these as fundamentally different processes under the same statute. A contract creditor's right to interest is close to automatic — it flows directly from the money being due, no hearing required. A tort plaintiff's right to interest doesn't exist until a court affirmatively creates it at a post-verdict hearing, and only if the court finds the paying party negotiated in bad faith while the receiving party did not. A tort plaintiff who can't show the defendant negotiated in bad faith gets no prejudgment interest at all, no matter how large the verdict or how long the case took.
Mandatory or discretionary
Once money is due under a qualifying contract or transaction, prejudgment interest under R.C. 1343.03(A) is not optional. For a tort claim, everything turns on the discretionary, fact-specific post-verdict hearing under R.C. 1343.03(C). The Ohio Supreme Court's four-factor test for "good faith effort to settle," from Kalain v. Smith, asks whether a party (1) fully cooperated in discovery, (2) rationally evaluated its risks and potential liability, (3) didn't unnecessarily delay the proceedings, and (4) made or responded to a settlement offer in good faith — and a party with an objectively reasonable, good-faith belief that it has no liability doesn't even need to make a monetary offer to satisfy the test. The trial court's finding on this question is reviewed only for abuse of discretion.
Simple or compound
Neither the contract provision nor the tort provision authorizes compounding; both compute a simple percentage rate applied to the principal or judgment amount. Because R.C. 5703.47 resets the applicable rate every calendar year rather than locking in one rate for the life of the case, a long-running contract claim is effectively a series of simple-interest calculations stacked year by year, not a single compounding calculation.
Claims against the government
A claim against the State of Ohio in the Court of Claims runs through R.C. 2743.18(A), not R.C. 1343.03 directly. That statute makes prejudgment interest mandatory — "shall be allowed" — for the same period and at the same rate that would apply between private parties, with the court's only discretion being whether to deny interest for a period of delay the claimant itself caused. In Royal Electric Construction Corp. v. Ohio State University, the Ohio Supreme Court held this standard reaches even a contract sum that was disputed and "not capable of ascertainment until determined by the court" — rejecting the older "liquidated or capable of ascertainment" test that lower courts had applied to private-party contract claims, and replacing it, for claims against the state, with a single question: has the aggrieved party been fully compensated? That makes prejudgment interest against the state, for a contract claim, arguably easier to obtain than the traditional private-party standard, not harder.
Other exceptions
R.C. 1343.03(C)'s tort-interest mechanism explicitly excludes future damages found by the jury from the interest calculation. R.C. 1343.03(D) also exempts any judgment governed by Ohio's workers' compensation chapter (R.C. Chapter 4123) or any case where some other statute specifies a different interest period.
What trips people up
The single biggest surprise for a tort plaintiff is that prejudgment interest isn't automatic at all — it has to be affirmatively requested and won at a separate hearing held after the verdict, and the whole hearing turns on whether the DEFENDANT negotiated in bad faith, not on how badly the plaintiff was hurt or how large the verdict was. A plaintiff who assumes interest will simply be added to a tort verdict, the way it would be on an unpaid invoice, can be surprised to learn they have to prove the other side failed to negotiate honestly.
The Kalain four-factor test is not a bad-faith standard in the ordinary sense — a defendant with a genuine, reasonable belief that it isn't liable doesn't even have to make a settlement offer to satisfy it. A plaintiff who assumes any defendant that goes to trial and loses "must have" negotiated in bad faith is applying the wrong test.
The floating statutory rate is also easy to miss: because R.C. 5703.47 resets every year, a case that runs from 2022 through 2026 accrues interest at a different rate for each of those years (3% for 2022, 5% for 2023, 8% for 2024, 8% for 2025, 7% for 2026), not one flat rate for the whole period.
Common questions
What is Ohio's prejudgment interest rate right now?
7% per year for calendar year 2026, for both the contract and tort tracks under R.C. 1343.03, unless a written contract specifies a different rate. The rate is recalculated every year based on the federal short-term rate.
Do I automatically get prejudgment interest if I win a personal injury case in Ohio?
No. You have to separately move for a post-verdict hearing under R.C. 1343.03(C) and show the defendant failed to make a good faith effort to settle while you did not. Interest is not part of the jury's verdict.
Does the interest rate compound over the life of a long case?
No, it stays simple. But because the rate itself is reset every year, a multi-year contract case can effectively use a different simple rate for each calendar year it was pending.
Is it easier or harder to get prejudgment interest from the State of Ohio than from a private defendant?
For a contract claim, arguably easier: the Ohio Supreme Court has held that the ordinary "liquidated or ascertainable" hurdle that can apply to private-party contract claims doesn't apply to a contract claim against the state, where the only real question is whether the claimant has been fully compensated.
Statutes and sources
- R.C. 1343.03(A) (contract/written-instrument interest) — "when money becomes due and payable upon any bond, bill, note, or other instrument of writing ... the creditor is entitled to interest at the rate per annum determined pursuant to section 5703.47 ... unless a written contract provides a different rate." Accessed 2026-07-05: https://codes.ohio.gov/ohio-revised-code/section-1343.03
- R.C. 1343.03(C) (tort prejudgment interest) — requires a post-verdict good-faith hearing before any tort prejudgment interest is computed, quoted in full above. Accessed 2026-07-05: https://codes.ohio.gov/ohio-revised-code/section-1343.03
- R.C. 1343.03(D) (exclusions) — exempts actions against the state in the Court of Claims and actions under the workers' compensation chapter. Accessed 2026-07-05: https://codes.ohio.gov/ohio-revised-code/section-1343.03
- R.C. 5703.47(B) (rate-setting formula) — "the rate determined by the commissioner under this section, rounded to the nearest whole number per cent, plus three per cent, shall be the interest rate per annum ... for interest that accrues during the following calendar year." Accessed 2026-07-05: https://codes.ohio.gov/ohio-revised-code/section-5703.47
- Ohio Department of Taxation, Annual Certified Interest Rates — confirms the 7% rate for calendar year 2026 under R.C. 5703.47. Accessed 2026-07-05: https://tax.ohio.gov/home/annual-certified-interest-rates
- R.C. 2743.18(A) (Court of Claims Act) — "Prejudgment interest shall be allowed with respect to a civil action on which a judgment or determination is rendered against the state for the same period of time and at the same rate as allowed between private parties." Accessed 2026-07-05: https://codes.ohio.gov/ohio-revised-code/section-2743.18
- Kalain v. Smith, 25 Ohio St. 3d 157 (1986) — the four-factor "good faith effort to settle" test quoted in full above. Accessed 2026-07-05: https://www.courtlistener.com/opinion/6868162/kalain-v-smith/
- Royal Electric Construction Corp. v. Ohio State University, 73 Ohio St. 3d 110 (1995) — held that prejudgment interest against the state under R.C. 2743.18(A) and 1343.03(A) applies "regardless of whether the judgment is based on a claim which was liquidated or unliquidated," replacing the liquidated/ascertainable test with a "fully compensated" standard for claims against the state. Accessed 2026-07-05: https://www.courtlistener.com/opinion/10683222/royal-electric-constr-corp-v-ohio-state-univ/
Source links
Every statute quoted above, linked, with the date we checked it.