Prejudgment Interest Rules in South Carolina
At a glance
| Governing law | S.C. Code § 34-31-20(A) sets the general prejudgment ("legal interest") rate for any ascertained sum of money that is due; § 34-31-20(B), in the same section, sets a separate, higher, annually-compounding POSTjudgment rate. § 15-78-120(b) of the South Carolina Tort Claims Act separately bars interest before judgment on an award under that chapter |
|---|---|
| Interest rate | A flat 8.75% a year for a private-party claim, set directly by the statute's own text (it doesn't float or get republished annually the way the postjudgment rate under subsection (B) does), unless the parties' own contract sets a different rate, in which case the contract rate controls instead |
| When interest starts running | From the date the obligation became demandable, either by the parties' own agreement or by operation of law, provided the sum was already certain or capable of being reduced to certainty at that time (Babb v. Rothrock). If the underlying claim wasn't demandable until later (for example, a contribution claim that only ripens once one party has paid and then demanded reimbursement), interest instead runs from the date suit was filed |
| Contract vs. tort claims | The statute doesn't mention contract or tort by name at all: the real dividing line is whether the DAMAGES are an ascertained sum certain, or capable of being reduced to certainty by a fixed method, not what legal theory produced them. A contract debt or a stated account is almost always ascertained. A tort claim can qualify too if the damages are a fixed, calculable amount (a specific repair bill, a stipulated loss), but ordinary personal-injury damages like pain and suffering are not "ascertained" until a jury fixes the number, so they typically draw no prejudgment interest under this statute at all |
| Mandatory or discretionary | Once a claim clears the ascertained-sum threshold, interest is a matter of right, not something a court can grant or withhold as a matter of discretion: the real gatekeeping happens earlier, in deciding whether the claim actually qualifies as ascertained in the first place |
| Simple or compound | Simple interest only. A federal appeals court applying South Carolina law held directly that no South Carolina statute allows compounding prejudgment interest under § 34-31-20(A), reversing a trial court that had compounded it monthly (Liberty Mutual Ins. Co. v. Year Round Pool, Inc., 4th Cir. 1996): a sharp contrast with subsection (B)'s postjudgment rate, which the statute's own text says compounds annually |
| Claims against the government | For claims under the Tort Claims Act, § 15-78-120(b) bars interest before judgment in an award against the state or a political subdivision, on top of separate per-person and per-occurrence damages caps that apply to the same claims |
| Other exceptions | Parties are always free to contract for a different (including higher) interest rate, which then displaces the 8.75% statutory rate entirely (Turner Coleman, Inc. v. Ohio Constr. & Eng'g, Inc., 251 S.E.2d 738 (S.C. 1979)). Because the right depends on the sum being ascertained, a claim whose amount is genuinely left to a fact-finder's judgment, not merely disputed as to liability, draws no prejudgment interest, whatever the claim type |
Requirements one by one
Governing law
S.C. Code § 34-31-20 does two jobs in one section: subsection (A) sets the prejudgment ("legal interest") rate for ascertained sums, and subsection (B), just below it, sets a separate, higher postjudgment rate that compounds annually and gets reset every January by South Carolina Supreme Court order. A wholly separate statute, § 15-78-120(b) of the South Carolina Tort Claims Act, bars prejudgment interest outright on a claim against the state or a political subdivision.
Interest rate
8.75% a year, stated directly in the statute's text, it doesn't float with any market benchmark and doesn't get republished annually the way the postjudgment rate does. Parties can contract around it: if the parties' own agreement sets a different interest rate, courts apply that rate instead of the statutory 8.75%.
When interest starts running
Interest starts from the date the obligation became demandable, either because the parties agreed to a due date or because the law fixed one, but only if the sum was already certain, or capable of being reduced to certainty by objective calculation, at that point. The South Carolina Supreme Court has stated the test this way: whether "the measure of recovery, not necessarily the amount of damages, is fixed by conditions existing at the time the claim arose." If a claim wasn't actually demandable until something else happened first (for example, a contribution claim that only ripens once one party pays a shared debt and then demands reimbursement from the others), interest instead starts from the date the lawsuit was filed.
Contract vs. tort claims
South Carolina doesn't draw this line at all in its prejudgment interest statute. What matters is whether the damages are an ascertained sum certain, not whether the claim sounds in contract or tort. A contract debt or a stated account is almost always ascertained and draws interest as a matter of course. A tort claim can qualify too, if the damages are a fixed, calculable figure, a specific repair bill, a stipulated property-damage loss, but ordinary personal-injury damages like pain and suffering, disfigurement, or future lost earning capacity are not "ascertained" until a jury actually sets the number, so they typically draw no prejudgment interest under this statute.
Mandatory or discretionary
Once a claim clears the ascertained-sum threshold, prejudgment interest is treated as a matter of right rather than something a judge can grant or deny as a matter of discretion. The real gatekeeping in South Carolina happens earlier: deciding whether the claim actually qualifies as an ascertained sum in the first place is where the litigated disputes are.
Simple or compound
Simple interest only. A federal appeals court applying South Carolina law put it plainly: "no South Carolina statute allows for compounding prejudgment interest," reversing a trial court that had awarded 8.75% compounded monthly and remanding for a corrected simple-interest award. That's a deliberate contrast with subsection (B)'s postjudgment rate, which the statute's own text says compounds annually.
Claims against the government
For claims under the South Carolina Tort Claims Act, § 15-78-120(b) states that no damages award against the state or a political subdivision may include interest before judgment, on top of separate damages caps for the same claims (generally $300,000 per person and $600,000 per occurrence, or $1.2 million where a licensed physician or dentist employed by a governmental entity caused the harm).
Other exceptions
Because the entire right turns on the damages being ascertained, a claim whose amount is genuinely left to a fact-finder's judgment, as opposed to merely being disputed on liability, gets no prejudgment interest no matter how the claim is framed. Parties remain free to contract around the statutory 8.75% rate at any time.
What trips people up
The current 10.75% figure that circulates every January in South Carolina legal news is the POSTjudgment rate under subsection (B), reset annually by Supreme Court order, not the prejudgment rate, which stays flat at 8.75% regardless of what the postjudgment rate does that year. Using the wrong one under- or overstates interest owed for the period before judgment.
Compounding is an easy mistake to make, especially when working from a spreadsheet template built for the postjudgment rate: prejudgment interest under § 34-31-20(A) is simple interest, full stop, even though the postjudgment rate one subsection down compounds annually.
Assuming a personal-injury claim automatically earns prejudgment interest the same way a contract debt does is the biggest trap, most tort damages aren't "ascertained" until the jury actually returns a number, so there is often nothing to award interest on for the period before verdict.
Common questions
What's South Carolina's prejudgment interest rate? 8.75% a year on an ascertained sum, unless the parties' contract set a different rate. This does not change year to year, unlike the postjudgment rate.
Can I get prejudgment interest on a South Carolina personal injury claim? Usually not, unless the specific damages you're claiming are a fixed, calculable amount (like a repair bill) rather than a jury-determined figure like pain and suffering.
Does South Carolina prejudgment interest compound? No. It's simple interest under the controlling case law interpreting § 34-31-20(A); only the separate postjudgment rate compounds, and only annually.
Can I get prejudgment interest on a claim against a South Carolina city or county? For a damages claim under the Tort Claims Act, no: § 15-78-120(b) excludes interest before judgment. Different statutory claims require their own analysis.
Statutes and sources
- S.C. Code § 34-31-20(A), "In all cases of accounts stated and in all cases wherein any sum or sums of money shall be ascertained and, being due, shall draw interest according to law, the legal interest shall be at the rate of eight and three-fourths percent per annum." Accessed 2026-10-06: https://www.scstatehouse.gov/code/t34c031.php
- S.C. Code § 34-31-20(B), "A money decree or judgment of a court enrolled or entered must draw interest according to law. The legal rate of interest is equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which the damages are awarded, plus four percentage points, compounded annually." Accessed 2026-10-06: https://www.scstatehouse.gov/code/t34c031.php
- S.C. Code § 15-78-120(a)-(b), damages caps and "No award for damages under this chapter shall include punitive or exemplary damages or interest prior to judgment." Accessed 2026-10-06: https://www.scstatehouse.gov/code/t15c078.php
- Babb v. Rothrock, 426 S.E.2d 789 (S.C. 1993), states the ascertained-sum/accrual test for prejudgment interest. Citation verified via legalresearch (courtlistener id 1308025): https://www.courtlistener.com/opinion/1308025/babb-v-rothrock/
- Liberty Mutual Ins. Co. v. Year Round Pool, Inc., No. 96-1019 (4th Cir. Dec. 30, 1996) (unpublished), holds South Carolina law does not permit compounding prejudgment interest under § 34-31-20(A). Accessed 2026-07-05: https://www.ca4.uscourts.gov/opinions/Unpublished/961019.U.pdf
Source links
Every statute quoted above, linked, with the date we checked it.
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