South Dakota: Prejudgment Interest Rules
The short answer
Yes, and South Dakota treats a contract claim and a tort claim the same way. SDCL § 21-1-13.1 entitles anyone who recovers damages -- contract or tort alike -- to interest from the day the loss or damage occurred, at the contract's own rate if the contract sets one, or otherwise at the statutory 'Category B' rate (currently 10% a year). It's mandatory, not discretionary, once it applies -- but it isn't automatic in practice: if the date the loss occurred is a disputed fact, the statute requires a jury finding (often by special interrogatory) to fix that date, and South Dakota's Supreme Court has held that a party who fails to ask for that finding can waive prejudgment interest entirely, even though the underlying right was never in doubt. Interest never reaches future damages, punitive damages, or intangible harms like pain and suffering or emotional distress.
| Governing law | One statute covers both contract and tort claims: SDCL § 21-1-13.1, 'Interest on damages -- Prejudgment interest.' It replaced an older, narrower statute, former § 21-1-13 (repealed 2014), which still controls any suit commenced before July 1, 1990 -- effectively obsolete now, since no current suit could have been filed that long ago. The statutory rate itself comes from a separate general-purpose statute, § 54-3-16, which sets the numeric 'Category' interest rates used throughout the SD code |
|---|---|
| Interest rate | One rate for every claim type: the parties' own contract rate if the contract specifies one; otherwise the 'Category B' rate under § 54-3-16(2), currently a flat 10% a year (not a floating, benchmark-tied rate). A separate, lower 'Category A' rate (4.5%) applies only to inverse condemnation actions, which this survey excludes as a specialized proceeding rather than ordinary civil damages |
| When interest starts running | From the day the loss or damage occurred -- not the date of filing, demand, or judgment. If the exact date the loss occurred is a disputed question of fact, the statute itself supplies a fallback: interest instead commences on whatever date the jury specifies in its verdict (via a special interrogatory, if necessary), running through the verdict date, or the date judgment is entered if there's no verdict |
| Contract vs. tort claims | No split at all -- § 21-1-13.1 applies identically to 'any person who is entitled to recover damages,' whether the claim sounds in contract, tort, or otherwise (counterclaim, cross claim, third-party claim). Unlike the older, repealed statute it replaced, the current law doesn't require damages to be 'liquidated' or 'ascertainable' by any special test; the only thing that varies is which date interest starts from, and that turns on whether the date of loss is disputed, not on the type of claim |
| Mandatory or discretionary | Mandatory 'when applicable,' confirmed by South Dakota's Supreme Court -- once the statutory conditions are met, awarding interest isn't a matter of judicial discretion. But mandatory-in-principle doesn't mean automatic: because the statute requires the date of loss to be established (through a jury verdict or a special interrogatory if that date is disputed), a party who fails to request the necessary jury instruction or interrogatory -- and fails to object when the verdict form omits it -- can forfeit the claim to prejudgment interest entirely, even though the underlying entitlement was never disputed |
| Simple or compound | The statute and its companion rate provision speak only in terms of an annual ('per year') rate, consistent with simple interest, but this survey did not locate a South Dakota case squarely confirming simple interest (as opposed to compounding) for a § 21-1-13.1 prejudgment award specifically |
| Claims against the government | South Dakota's sovereign immunity is waived only to the extent of insurance or risk-pool coverage, not as a general matter. For the State itself, § 21-32-16 says the State 'shall be deemed to have waived' immunity and consented to suit only 'to the extent' it has purchased liability insurance under § 21-32-15 and coverage applies; state employees acting within the scope of employment are separately immune except to that same extent (§ 21-32-17). For every other public entity (cities, counties, school districts, and the like), § 21-32A-1 waives immunity in the same way -- only 'to the extent' the entity participates in a risk-sharing pool or carries liability insurance. Neither statute, nor any case this survey located, creates a distinct prejudgment-interest rule for a government defendant once a claim clears this insurance-based immunity threshold |
| Other exceptions | The statute's own text carves out three categories entirely: 'Prejudgment interest is not recoverable on future damages, punitive damages, or intangible damages such as pain and suffering, emotional distress, loss of consortium, injury to credit, reputation or financial standing, loss of enjoyment of life, or loss of society and companionship.' The other major exception is procedural rather than substantive: because entitlement depends on fixing the date of loss, a party's failure to secure a jury finding on a disputed date of loss operates as a waiver of the interest claim, regardless of how strong the underlying case for interest otherwise was |
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The short answer
South Dakota runs prejudgment interest through a single statute that treats a contract claim and a tort claim exactly alike. SDCL § 21-1-13.1 entitles anyone who recovers damages -- in the main action or on a counterclaim, cross claim, or third-party claim -- to interest running from the day the loss or damage occurred. If the parties' own contract sets an interest rate, that rate applies; otherwise the statutory "Category B" rate under § 54-3-16 applies, currently a flat 10% a year. The South Dakota Supreme Court has said the award is mandatory once the statute applies, not something a judge can simply decline. But there's a real catch: if the exact date the loss occurred is a disputed fact, the statute requires that date to be pinned down by the jury, often through a special interrogatory -- and in a case decided just weeks before this page was last checked, the state's highest court held that a plaintiff who never asked for that jury finding waived the interest claim entirely, even though nothing else about the right to interest was in question.
Requirements one by one
Governing law
SDCL § 21-1-13.1 is the operative statute, and it's a comprehensive rewrite of South Dakota's prejudgment interest law effective July 1, 1990. It replaced a narrower predecessor, former § 21-1-13 (formally repealed in 2014), which is now essentially obsolete: it only ever governed a suit commenced before that 1990 cutoff, so no case filed today could be affected by it. The actual numeric interest rate isn't stated in § 21-1-13.1 itself -- it's borrowed from a separate, general-purpose rate table, § 54-3-16, which sets the various "Category" interest rates used throughout the South Dakota code for many different statutes at once.
Interest rate
There's one rate structure for every claim type covered by the statute: the contract's own stated rate, if the parties' contract provides one, or otherwise the "Category B" rate set by § 54-3-16(2) -- currently a flat 10% per year. Unlike states that tie their rate to a moving benchmark (a T-bill rate or a bank's prime rate), South Dakota's Category B figure is a fixed statutory number that only changes if the legislature amends § 54-3-16 itself. A different, lower rate, Category A (4.5%), is reserved for inverse condemnation actions -- a specialized proceeding outside this survey's ordinary-civil-damages scope.
When interest starts running
Interest starts "from the day that the loss or damage occurred" -- not the date of filing suit, the date of a demand, or the date of judgment. The statute anticipates that this date won't always be obvious or undisputed: if there's "a question of fact as to when the loss or damage occurred," interest instead starts on whatever date the jury specifies in its verdict (with a special interrogatory submitted to the jury if necessary to get that finding), and runs through the date of the verdict, or through the date judgment is entered if there was no verdict at all.
Contract vs. tort claims
South Dakota doesn't split this by claim type in any way. The statute's language -- "any person who is entitled to recover damages" -- reaches a contract claim, a tort claim, and any counterclaim, cross claim, or third-party claim alike, at the same rate and under the same mechanism. This is a deliberate departure from the older, repealed statute it replaced, which (like many states' rules) required damages to be "certain or capable of being made certain by calculation" before interest could attach at all. The current statute drops that ascertainability requirement entirely; the only thing that varies from case to case is which date interest starts running from, and that depends on whether the date of loss is disputed, not on whether the underlying claim is contract or tort.
Mandatory or discretionary
Mandatory in principle: South Dakota's Supreme Court has repeatedly said prejudgment interest under § 21-1-13.1 is required, not a matter left to a trial court's discretion, once the statute's conditions are satisfied. But "mandatory" here doesn't mean "automatic" in practice. Because the statute conditions the interest award on establishing the date the loss occurred, a party who never asks the trial court for a jury instruction or a special interrogatory to fix that date -- and doesn't object when the verdict form omits one -- can lose the right to prejudgment interest through waiver, even where the entitlement itself was never in genuine dispute. In a case decided in June 2026, South Dakota's Supreme Court affirmed exactly that outcome: the trial court's denial of prejudgment interest was upheld not because the plaintiff lacked a right to it, but because the plaintiff's own failure to secure the necessary jury finding on a disputed date of loss forfeited the claim.
Simple or compound
The statute and its companion rate table describe the rate only in "per year" terms, which is the same phrasing states elsewhere in this survey have used to mean simple, non-compounding interest -- but this survey did not locate a South Dakota court decision that squarely confirms simple interest (rather than compounding) for a § 21-1-13.1 prejudgment award specifically, so this is noted as an open question rather than a settled one.
Claims against the government
South Dakota's sovereign immunity is waived only to the extent a government defendant has insurance or risk-pool coverage for the claim -- there's no broader, general waiver. For the State itself, a separate statute lets the State purchase liability insurance, and immunity is deemed waived only "to the extent" that insurance is purchased and coverage actually applies; state employees acting within the scope of their employment are likewise immune except to that same extent. Every other public entity in South Dakota -- cities, counties, school districts, and similar bodies -- works the same way under a parallel statute: immunity is waived only "to the extent" the entity participates in a risk-sharing pool or carries liability insurance reaching the claim. Neither statute, nor any case this survey located, creates a rule about prejudgment interest that's specific to a government defendant once a claim clears this insurance-based immunity threshold in the first place.
Other exceptions
The statute itself lists three flat exclusions: prejudgment interest is "not recoverable on future damages, punitive damages, or intangible damages such as pain and suffering, emotional distress, loss of consortium, injury to credit, reputation or financial standing, loss of enjoyment of life, or loss of society and companionship." Beyond those substantive carve-outs, the biggest practical limit is procedural: because the whole mechanism depends on establishing the date of loss, failing to secure a jury finding on that date when it's disputed operates as a complete waiver of the interest claim -- a real trap for a plaintiff who assumes the "mandatory" label means the interest will simply show up in the judgment without any extra work at trial.
What trips people up
The single biggest trap is treating "mandatory" as "automatic." South Dakota's Supreme Court has been clear that prejudgment interest isn't discretionary once it applies -- but it has just as clearly held that a party can lose the claim anyway by failing to ask for a jury instruction or special interrogatory establishing the date of loss when that date is genuinely disputed. Requesting interest in the complaint isn't enough; it has to be followed through at the jury-instruction and verdict-form stage.
The second trap is assuming the older, "liquidated damages" style rule still applies. South Dakota's current statute doesn't require damages to be certain or easily calculable at all -- that requirement belonged to the repealed predecessor statute, which no longer governs any pending case. A party or attorney relying on decades-old case law describing an ascertainability test may be citing the wrong statute entirely.
Common questions
What's South Dakota's prejudgment interest rate?
The contract's own rate if the contract specifies one; otherwise a flat 10% a year (the "Category B" rate under SDCL § 54-3-16).
Does South Dakota require my damages to be a fixed, calculable amount before I can get prejudgment interest?
No, not anymore. The current statute, SDCL § 21-1-13.1, dropped that requirement when it replaced the older law in 1990 -- it applies to any recoverable damages, contract or tort, regardless of how easily the final number was calculable in advance.
Can I lose my right to prejudgment interest even if I clearly qualify for it?
Yes. If the date your loss occurred is a disputed fact, you need a jury instruction or special interrogatory fixing that date. South Dakota's Supreme Court has held that failing to request one waives the claim, even where the entitlement to interest itself was never in question.
Can I get prejudgment interest on my pain-and-suffering damages in South Dakota?
No. The statute expressly excludes intangible damages like pain and suffering, emotional distress, and loss of consortium, along with future damages and punitive damages.
Statutes and sources
- SDCL § 21-1-13.1 -- "Any person who is entitled to recover damages... is entitled to recover interest thereon from the day that the loss or damage occurred... Prejudgment interest is not recoverable on future damages, punitive damages, or intangible damages such as pain and suffering, emotional distress, loss of consortium... If there is a question of fact as to when the loss or damage occurred, prejudgment interest shall commence on the date specified in the verdict or decision... Prejudgment interest on damages arising from a contract shall be at the contract rate, if so provided in the contract; otherwise... it shall be at the Category B rate of interest specified in § 54-3-16." Accessed 2026-07-05: https://sdlegislature.gov/Statutes/21-1-13.1
- SDCL § 54-3-16 -- "Category A rate of interest is four and one-half percent per year; ... Category B rate of interest is ten percent per year..." Accessed 2026-07-05: https://sdlegislature.gov/Statutes/54-3-16
- SDCL § 21-32-16 -- "To the extent such liability insurance is purchased pursuant to § 21-32-15 and to the extent coverage is afforded thereunder, the state shall be deemed to have waived the common law doctrine of sovereign immunity..." Accessed 2026-07-05: https://sdlegislature.gov/Statutes/21-32-16
- SDCL § 21-32A-1 -- "To the extent that any public entity, other than the state, participates in a risk sharing pool or purchases liability insurance and to the extent that coverage is afforded thereunder, the public entity shall be deemed to have waived the common law doctrine of sovereign immunity..." Accessed 2026-07-05: https://sdlegislature.gov/Statutes/21-32A-1
Source links
Every statute quoted above, linked, with the date we checked it.