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What Is a Supersedeas Bond?

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  • Written By: Daphne Mallory
  • Edited By: Melissa Wiley
  • Last Modified Date: 27 August 2014
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A supersedeas bond is a defendant’s appeal bond that allows the defendant, the appellant, to delay payment of a judgment that was awarded at trial until the appeal is decided. The purpose of the bond, which is a type of surety bond, is to ensure that the appellant will pay the judgment as well as any damages caused because the appeal delayed payment. The court stays the judgment of the lower court in jurisdictions where a supersedeas bond is required as part of the process of appealing a decision. If a bond is not required, the appellant has to file a motion to stay the judgment and has to post some type of bond or provide a notice of a cash deposit if the court grants the stay. Appellants often have to post enough of a bond to cover the interest on the judgment that accrues during the appeal, but the amount is limited by statutes.

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A trial court may award a judgment consisting of both compensatory damages and punitive damages. An individual or business wanting to overturn one or both often has to post a supersedeas bond to cover both while the appellant court stays the judgment pending the outcome of the appeal. For example, if a company loses a product liability case and the jury awards the plaintiffs $1 million US Dollars (USD) in compensatory damages and $2 million USD in punitive damages, then the company may have to post a supersedeas bond that covers $3 million USD, plus the potential interest on that judgment that will accrue during the appeal.

Some courts may be open to arguments from the appellant to limit the bond to compensatory damages and interest payments only. Appellate courts often rule that all of the bond must be paid. The reason is to guarantee that the plaintiff will get paid according to what was awarded in the trial court.

Appellants can obtain a supersedeas bond from an insurance company that sells surety bonds. The company is often responsible for paying the amount secured by the bond if the appellant cannot. The appellant pays the insurance company a premium for the bond, but not the total amount that the bond guarantees. The process of applying for a bond is often simple, consisting of a one-page application form. Once the appellant secures a bond, he can provide a notice to the courts of his intent to appeal and the amount of the bond he has posted.

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Discuss this Article

anon348962
Post 3

I believe that many attorneys appeal a judgment for the sole purpose of delay. It can be used by the appellant, as leverage against the appellee (for reasons of settlement) that would rather not incur the costs of another trial, that might be reversed or remanded. On the other hand, a supersedeas bond could be leverage for the appellee to have the upper hand in any settlement negotiations if an appeal trial is not wanted by either.

hamje32
Post 2

@NathanG - Well, you can argue for reduced bond amounts, according to the article.

However, I think you have to take into account what a bond is. It’s proof that you will pay up if you fail on appeal. I believe that there’s no better way to do that than to fork up the full judgment amount when you post bond.

It’s a legal process and you’ve got nothing to fear, as long as you’re not planning to skip out of town or something like that. I’m sure that the courts will make sure you get your money back if you succeed on appeal.

NathanG
Post 1

I guess it’s true that money is the answer for everything. Now defendants have to pay just for delay.

The article gives an example of a bond payment that is in the millions of dollars, pretty much the same amount as the award amount would have been. I don’t think that arrangement makes sense, personally. In my opinion, all supersedeas bond arrangements (when bond is required) should be a fraction or a percentage of the award amount.

In other words, it should mirror the kind of setup we have with bail bonds. I don’t think there is any set figure for a bail bond, but it depends on the judge.

Since a defendant is appealing the decision, it doesn’t make sense to have him pony up the full award amount as bond, plus interest.

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