Tennessee: Prejudgment Interest Rules
The short answer
It depends entirely on the type of claim. For a breach-of-contract or other non-personal-injury claim, a court or jury may award prejudgment interest in its discretion, at any rate up to 10% a year (or the contract's own rate, if the transaction is subject to Tennessee's usury-ceiling statute). For a personal-injury or wrongful-death tort claim, Tennessee courts have held for well over a century that prejudgment interest simply isn't available at all -- not a matter of discretion, a flat legal bar. There's no fixed statutory start date; a court sets it based on fairness to both sides. A claim against the State of Tennessee goes through the separate Claims Commission, which can award interest (including on injury-based claims) capped at the state's floating post-judgment rate instead of the private-party 10% ceiling.
| Governing law | Tenn. Code Ann. § 47-14-123 (discretionary prejudgment interest generally, cross-referencing § 47-14-103's rate ceilings); the personal-injury/wrongful-death bar comes from case law, not a separate statute; claims against the state run through the Claims Commission Act, § 9-8-307(d) |
|---|---|
| Interest rate | Any rate up to a maximum effective 10%/yr for most claims, or the rate fixed by the parties' own note/contract/writing up to § 47-14-103's ceiling for that category of transaction; a claim against the state is instead capped at § 47-14-121's floating post-judgment rate (8.75%/yr as of mid-2026) |
| When interest starts running | No fixed statutory start date -- § 47-14-123 leaves the date to the court's or jury's equitable discretion, guided by case-law factors like when the debt became definite and whether either side caused delay |
| Contract vs. tort claims | Sharply different, and not just a matter of degree: a contract (or other non-personal-injury) claim can get discretionary prejudgment interest under § 47-14-123, while a personal-injury or wrongful-death tort claim gets NONE at all -- a firm, long-standing common-law bar, not mere reluctance to award it |
| Mandatory or discretionary | Discretionary for an eligible claim -- courts and juries award it 'in accordance with the principles of equity,' weighing whether the debt was definite, whether the defendant had reasonable grounds to dispute it, and whether either side delayed; personal-injury and wrongful-death claims are not merely low-discretion, they are categorically ineligible |
| Simple or compound | Simple interest -- § 47-14-123 contains no compounding language, describing only a maximum annual rate applied to the damages |
| Claims against the government | A claim against the State of Tennessee goes through the Claims Commission, which may award discretionary interest -- including on injury-based tort claims within its narrow jurisdiction, unlike the flat personal-injury bar for private parties -- but capped at the postjudgment rate under § 47-14-121, not the ordinary 10% ceiling, and never punitive damages |
| Other exceptions | Personal-injury and wrongful-death tort claims get no prejudgment interest at all under case law; claims against the state are capped at $300,000 per claimant/$1,000,000 per occurrence and exclude punitive damages entirely, on top of the different interest-rate mechanism |
Compare this rule across all 50 states + DC →
The short answer
Tennessee splits prejudgment interest along claim type in a way that surprises
a lot of people bringing a personal-injury case. A contract dispute (or almost
any other civil claim that isn't personal injury or wrongful death) can earn
discretionary prejudgment interest up to 10% a year. A personal-injury or
wrongful-death tort claim cannot -- Tennessee courts have followed that rule
since 1891, and reaffirmed it as recently as a 2024 Court of Appeals decision.
There's no fixed date the interest clock starts on; that's left to the
court's sense of what's fair given how the case played out.
Requirements one by one
Governing law
Tenn. Code Ann. § 47-14-123 is the general prejudgment-interest statute. It
doesn't create the right to interest from scratch -- it caps and channels
whatever right "the statutory and common laws of the state as of April 1,
1979" already allowed, at a maximum effective rate of 10% a year (or a
narrower cap for a contract governed by § 47-14-103's rate schedule). The
personal-injury/wrongful-death bar isn't in this statute at all; it comes
from a separate, purely judge-made line of cases. A claim against the State
of Tennessee runs through an entirely different statute, the Claims
Commission Act (§ 9-8-307), which has its own interest rule.
Interest rate
For an eligible claim, the ceiling is 10% a year, unless the claim involves a
contract, note, or other writing that fixes its own rate within the limits of
§ 47-14-103's rate schedule for that category of transaction -- in which case
that contract rate controls instead. Practitioners report that Tennessee
courts often award something less than the full 10% in practice, but the
statute sets 10% as the outer limit either way. A successful claim against
the state is capped differently: at the rate set for ordinary postjudgment
interest under § 47-14-121 (a floating, semiannual rate published by the
Administrative Office of the Courts -- 8.75% as of July 1, 2026), not the
private-party 10% ceiling.
When interest starts running
Neither § 47-14-123 nor any companion statute names a fixed accrual date.
Courts decide it case by case, as part of the same equitable analysis that
decides whether to award interest at all -- weighing factors like whether the
amount owed was definite or in genuine dispute, and whether either party
caused unreasonable delay in bringing or litigating the case (the framework
the Tennessee Supreme Court set out in Myint v. Allstate Ins. Co., 970
S.W.2d 920 (Tenn. 1998)).
Contract vs. tort claims
This is the dimension where Tennessee stands out. A contract claim, or
almost any other claim that doesn't involve personal injury or wrongful
death, can get discretionary interest under § 47-14-123. A personal-injury or
wrongful-death tort claim cannot get prejudgment interest at all -- a rule
the Tennessee Supreme Court first announced in Louisville & N.R. Co. v.
Wallace (Tenn. 1891) and Tennessee's Court of Appeals has reaffirmed
repeatedly since, including in Hollis v. Doerflinger, 137 S.W.3d 625 (Tenn.
Ct. App. 2003) (a wrongful-death case) and Francois v. Willis, 205 S.W.3d
915 (Tenn. Ct. App. 2006) (a personal-injury case). The line isn't always
obvious, though: in Haddon v. Vanlier (Tenn. Ct. App. 2024), the court held
that a claim against an injured driver's OWN uninsured-motorist insurance
carrier is a contract claim, not a personal-injury claim, even though it's
triggered by a personal injury -- so prejudgment interest was available
there despite the underlying wreck.
Mandatory or discretionary
For an eligible claim, an award of prejudgment interest is discretionary,
resting with the court or jury under an equitable, multi-factor test. For a
personal-injury or wrongful-death claim, it's not a matter of low discretion
that's rarely exercised -- courts treat it as legally unavailable, and a
trial court applying an "incorrect legal standard" by weighing the equities
anyway is reversible error.
Simple or compound
Section 47-14-123 describes only a maximum annual rate applied to the
damages for the relevant period -- nothing in its text calls for compounding,
so it functions as simple interest.
Claims against the government
Claims against the State of Tennessee don't go through the ordinary court
system at all -- they go to the Claims Commission under § 9-8-307, which
covers a defined list of negligence categories (vehicle accidents, dangerous
conditions on state property, and others) plus certain contract claims.
Unlike the flat bar for a private personal-injury defendant, § 9-8-307(d)
lets the commission award "such interest as the commissioner may determine
to be proper" on a successful claim -- including an injury-based one -- but
caps it at the ordinary postjudgment rate under § 47-14-121, not the
private-party 10% ceiling, and a contract claim against the state instead
gets the contract's own rate if one is fixed.
Other exceptions
Beyond the personal-injury/wrongful-death bar, a claim against the state
comes with its own package of limits under § 9-8-307(e): damages capped at
$300,000 per claimant and $1,000,000 per occurrence, and no punitive damages
at all, on top of the different interest-rate mechanism described above.
What trips people up
The biggest surprise for an injured plaintiff is learning that Tennessee's
"may be awarded... in accordance with the principles of equity" language in
§ 47-14-123 sounds like it covers every kind of claim, but a personal-injury
or wrongful-death claim never gets there in the first place -- the courts
have treated that category as outside the statute's reach since 1891, long
before the current statute was even written.
The line between a barred personal-injury claim and an interest-eligible
contract claim isn't always where it looks like it should be. Haddon v.
Vanlier shows a plaintiff can be injured in a car accident and still recover
prejudgment interest, because her claim against her own insurance carrier
under the policy is legally a contract claim, not a personal-injury claim --
even though the same wreck is what triggered it.
Don't confuse Tennessee's PREjudgment interest cap (10% under § 47-14-123,
unchanged since 1979) with its POSTjudgment interest rate (a floating rate
under § 47-14-121 that the legislature converted to a market-based, semiannual
formula in 2012). They're set by different mechanisms and can be very
different numbers in the same case.
Common questions
Can I get prejudgment interest in a Tennessee car accident injury case?
Not on a direct personal-injury claim against the at-fault driver -- Tennessee
courts have barred that since 1891. If you're instead pursuing your own
uninsured/underinsured motorist coverage, that's treated as a contract claim
against your insurer, so prejudgment interest can be available there.
What's the maximum prejudgment interest rate on a Tennessee contract
claim?
10% a year under § 47-14-123, unless the contract itself fixes a different
rate within the limits of § 47-14-103's rate schedule for that type of
transaction.
Is prejudgment interest automatic once I win?
No. Even for an eligible claim, awarding it is discretionary -- a court or
jury decides based on equity, considering things like whether the amount
owed was clear-cut and whether either side delayed the case.
Does prejudgment interest work differently if I sue the State of
Tennessee?
Yes. State claims go through the Claims Commission, which can award interest
even on some injury-based claims (unlike the flat bar for private
defendants), but the rate is capped at the state's floating postjudgment
rate, and punitive damages are unavailable entirely.
Statutes and sources
- Tenn. Code Ann. § 47-14-123 -- "Prejudgment interest, i.e., interest as an
element of, or in the nature of, damages, as permitted by the statutory
and common laws of the state as of April 1, 1979, may be awarded by
courts or juries in accordance with the principles of equity at any rate
not in excess of a maximum effective rate of ten percent (10%) per annum;
provided, that with respect to contracts subject to § 47-14-103, the
maximum effective rates of prejudgment interest so awarded shall be the
same as set by that section for the particular category of transaction
involved. In addition, contracts may expressly provide for the imposition
of the same or a different rate of interest to be paid after breach or
default within the limits set by § 47-14-103." Accessed 2026-07-05:
https://law.justia.com/codes/tennessee/title-47/chapter-14/part-1/section-47-14-123/ - Tenn. Code Ann. § 9-8-307(d)-(e) -- "The state will be liable for actual
damages only. ... The state will not be liable for punitive damages and
the costs of litigation other than court costs. ... If the claimant is
successful with any claim filed with the claims commission after January
1, 1985, the state shall pay such interest as the commissioner may
determine to be proper, not exceeding the legal rate as provided in
§ 47-14-121. In contract actions, interest may be awarded, but if the
rate of interest is provided in the contract, the award of interest shall
be at that rate." Subsection (e): "For causes of action arising in tort,
the state shall only be liable for damages up to the sum of three hundred
thousand dollars ($300,000) per claimant and one million dollars
($1,000,000) per occurrence." Accessed 2026-07-05:
https://www.uthsc.edu/research/sponsored-programs/agreements/documents/tca-9-8-307.pdf - Louisville & N.R. Co. v. Wallace, 17 S.W. 882 (Tenn. 1891) -- the
original source of the rule that prejudgment interest is unavailable in a
personal-injury tort case; read via its quotation and application in
Haddon v. Vanlier (Tenn. Ct. App. 2024), not independently verified as a
standalone citation. - Hollis v. Doerflinger, 137 S.W.3d 625 (Tenn. Ct. App. 2003) --
reaffirmed the Wallace bar in a wrongful-death case. Verified via
legalresearch. - Francois v. Willis, 205 S.W.3d 915 (Tenn. Ct. App. 2006) -- applied the
same bar to a personal-injury claim, rejecting the argument that a
rejected offer of judgment makes damages "ascertainable" enough to escape
it. Verified via legalresearch (courtlistener id 1053081). - Haddon v. Vanlier, No. M2023-01151-COA-R3-CV (Tenn. Ct. App., decided
Oct. 28, 2024) -- held a claim against one's own uninsured-motorist
carrier is a contract claim, not personal injury, so the Wallace bar
doesn't apply; fetched and read in full via legalresearch (courtlistener
id 10162120). - Myint v. Allstate Ins. Co., 970 S.W.2d 920 (Tenn. 1998) -- sets the
equitable, multi-factor discretion test trial courts use to decide
whether and when to award prejudgment interest on an eligible claim.
Verified via legalresearch (courtlistener id 1060871). - Tennessee Judgment Interest Rates (Administrative Office of the Courts,
tncourts.gov) -- publishes the current floating postjudgment rate under
§ 47-14-121 (8.75% as of July 1, 2026), used here only to contrast with
the separate prejudgment rate. Accessed 2026-07-05:
https://tncourts.gov/tennessee-judgment-interest-rates
Source links
Every statute quoted above, linked, with the date we checked it.