If you’ve ever been stuck waiting forever for someone to pay you back, you already understand the basic idea behind prejudgment and postjudgment interest. The law just gives those frustrations official names.

Let me, Nimbus, resident feline legal scholar at Courtready Academy, walk you through it in plain language.

What is prejudgment interest?

Prejudgment interest covers the time before the court makes a decision.

Picture this: someone owes you money, but instead of paying, they take the scenic route through Delay Town. Weeks pass. Months pass. Maybe even years. Meanwhile, you could’ve used that money for rent, groceries, or a very respectable cat tree.

Prejudgment interest helps make up for that lost time. It’s the law’s way of saying, “You shouldn’t be penalized because someone else dragged things out.” The exact rate depends on the type of case and is set by the Ontario government quarterly.

What is postjudgment interest?

Postjudgment interest starts after the court has made its decision.

Once a judge says, “Yes, you’re owed this money,” the clock is ticking. If the person who owes you doesn’t pay right away, interest continues to build until they pay. Again, the Ontario government sets the applicable interest rate.

Think of it as a gentle legal nudge: “Please pay now. Not next month. Now.”

Why it matters?

Interest might seem small, but over long delays, it adds up. Many Ontarians win their case and collect the main amount, but forget about the extra dollars because of interest.

Want to know exactly how much prejudgment or postjudgment interest could apply to your situation? Use Courtready’s free Ontario prejudgment and postjudgement interest calculator here.

About Courtready.

Our goal is to empower Canadians with the right tools and knowledge to navigate our justice system with confidence. Check out our free Ontario prejudgment and postjudgment interest calculator, Toronto hearing dates monitoring tool and Ontario judicial regions map!

You can also learn about how to navigate Ontario’s Small Claims Court and your rights as a consumer in Ontario with Courtready Academy!