OCGA 51-12-14: Georgia’s Unliquidated Damages Interest Demand

Under OCGA 51-12-14, Georgia’s Unliquidated Damages Interest Act, a tort claimant can collect prejudgment interest on a demand amount when the defendant refuses to pay and the eventual verdict meets or exceeds that demand. The rate is the Federal Reserve prime rate plus three percent, locked in on the thirtieth day after the demand is mailed. The procedure is narrow, and missing any single step forfeits the entire interest award.¹

What the Demand Letter Must Say

The statute requires written notice stating a specific dollar amount the claimant demands for unliquidated damages in a tort action.¹ “Unliquidated” means the amount has not yet been fixed by agreement or court order. Any tort claim qualifies — not just personal injury or car accidents. Property damage, professional malpractice, and other tort actions all work, provided the damages have not already been reduced to a set figure.

The notice must explicitly state that it is being given under OCGA 51-12-14.¹ A letter that lays out a dollar figure but forgets to reference this code section will not trigger the interest provisions. The citation is not optional.

The dollar figure itself carries real consequence, because the verdict must equal or exceed it for any interest to be awarded. Pick a number too high and you lose the interest even if the jury comes in a dollar short. Pick a number too low and you shrink the base on which interest accrues.

Nothing in the statute requires the demand to go out before you file suit. The text conditions interest on whether the claimant “has given written notice” and the defendant fails to pay within thirty days, without specifying timing relative to the complaint.¹ Sending it early simply enlarges the window during which interest accrues.

How to Deliver the Notice

Three delivery methods are permitted: registered mail, certified mail, or statutory overnight delivery.¹ Regular first-class mail does not count. Hand delivery is not listed as an option. Use the wrong method and a court can deny the interest claim entirely.

Statutory overnight delivery under Georgia law means next-business-day delivery through the U.S. Postal Service or a commercial carrier regularly in the document-delivery business, with the sender receiving a receipt signed by the addressee or their agent.² UPS and FedEx satisfy that definition. The signed receipt is the proof you will need if the defendant later claims no notice was received.

One timing point gets missed often: the thirty-day clock runs from the date of mailing or delivering, not from the date the defendant opens the envelope.¹ Mail the demand on June 1 and the defendant has until July 1 to pay, whenever the letter actually arrives. Interest begins on the thirty-first day. Keep the mailing receipt and delivery confirmation, because you will need to present evidence of compliance if the case goes to judgment.

How the Interest Rate Is Set

The annual interest rate equals the Federal Reserve prime rate plus three percent, captured on the thirtieth day after the last written demand notice is mailed.¹ The prime rate comes from the Federal Reserve’s Statistical Release H.15.³ As of late March 2026, the published prime rate is 6.50 percent, which produces a statutory rate of 9.50 percent.

Once fixed, the rate does not change regardless of what market rates do during the litigation. Interest runs from the thirty-first day after the demand is mailed through the date judgment is entered.¹ The longer a case stretches on, the larger the interest award becomes.

The Verdict Has to Meet or Exceed the Demand

The interest award lives or dies with the verdict. A claimant collects prejudgment interest only if the jury verdict, or the judge’s award in a bench trial, equals or exceeds the amount stated in the demand notice.¹ A verdict of $149,999 on a $150,000 demand produces zero interest. There is no partial recovery and no pro-rata calculation.

When the verdict does clear the threshold, the judge adds the accrued interest to the judgment after the jury finishes its work. The claimant must present evidence of compliance with every statutory requirement: the written demand, the code-section reference, proper delivery, and the delivery confirmation.¹ The interest becomes part of the formal judgment and is enforceable like any other component of the award. Juries are generally not told about the potential interest during deliberations.

How a Defendant Can Stop Interest From Running

The statute gives the defendant a way to shut off the clock. At any time after the initial thirty-day window expires and before the claimant withdraws the demand, the defendant can send written notice offering to pay the full demand amount plus all interest accrued through that date. The claimant then has thirty days to accept. If the claimant does not accept, interest stops accruing on the thirtieth day after the defendant’s offer is mailed, even if the eventual verdict meets or exceeds the original demand.¹

The defendant’s offer must follow the same delivery rules — registered mail, certified mail, or statutory overnight delivery — and must also reference OCGA 51-12-14.¹ For a claimant, that means a counter-offer deserves close attention; ignoring it freezes the interest clock. For a defendant or insurer, this is one of the few available levers for limiting exposure once a valid demand has been served.

What Happens After Judgment

Prejudgment interest under OCGA 51-12-14 stops accruing when the court enters judgment. A separate statute, OCGA 7-4-12, then takes over. All Georgia judgments automatically bear post-judgment interest at an annual rate equal to the prime rate plus three percent, determined on the day the judgment is entered.⁴ This interest applies whether or not the judgment mentions it, and no separate motion is required.

A defendant who loses at trial can face two layers of interest: the prejudgment interest added to the verdict under OCGA 51-12-14, if the claimant complied with the statute, plus automatic post-judgment interest on the entire judgment amount, including the prejudgment interest already added, until the defendant pays in full.⁴

Tax Treatment of the Interest Portion

Prejudgment interest is taxable as ordinary income under federal law, regardless of whether the underlying tort damages are tax-free. Under 26 U.S.C. § 61(a)(4), interest received or credited to a taxpayer counts as gross income.⁵ Even where personal injury damages are excludable from income under IRC § 104(a)(2), the interest component is not. The IRS treats it as compensation for the time value of money, not for the injury itself.

Plan for the tax hit before spending the proceeds. The interest should be reported as income for the tax year in which you receive payment. In cases where interest has accrued over several years of litigation, overlooking this can create a sizeable liability at filing time.

1
Justia. Georgia Code 51-12-14 – Unliquidated Damages Interest Act
2
Justia. Georgia Code 9-10-12 – Certified Mail Equivalent to Registered Mail; Sufficient Compliance for Notice by Statutory Overnight Delivery
3
Federal Reserve Board. H.15 – Selected Interest Rates (Daily)
4
Justia. Georgia Code 7-4-12 – Interest on Judgments
5
Internal Revenue Service. IRS Chief Counsel Memorandum – Section 61(a)(4) Interest Income