The Civil Procedural Rules Committee of the Supreme Court of Pennsylvania, chaired by the Honorable R. Stanton Wettick, Jr. has submitted Proposed Recommendation No. 186 for the comment of the bench and bar. Comments are due no later than September 12, 2003.

Essentially, the proposal recommends the adoption of a procedural guideline (and sanctions for its violation) for the timely payment of settlement funds after resolution with a settling defendant/insurance carrier. The proposed rule is modeled after Philadelphia Local Rule 229.1.

Proposed Rule 229.1 (c) would require that the party being released by virtue of a settlement agreement deliver the settlement funds to the claimant or their attorney within twenty (20) days of receipt of the executed release. If court approval is required, Rule 229.1 does not apply until the settlement has been approved.

If the funds are not delivered timely, then the settling claimant may seek to invalidate the settlement agreement, or seek monetary sanctions by filing an affidavit of non-payment that includes certain required supporting documentation. The released party shall have twenty (20) days to file a response. If the court finds that the rule has been violated, and that there is no material dispute as to the terms of the settlement or the terms of the release, then the court shall impose sanctions in the form of interest calculated at the rate equal to the prime rate as published in the Wall Street Journal for that calendar year, plus one (1) percent simple interest, running from the twenty-first (21st) day to the date of the delivery of the settlement funds. Reasonable attorney’s fees incurred in preparing the affidavit of non-payment shall also be awarded.

Although the proposed rule has not yet been passed, considering that it has already been utilized effectively in Philadelphia County, it is expected that the rule will receive the approval of the Supreme Court and therefore be applicable statewide in the immediate future.

For more information about litigation matters, please contact Robert L. Monks at rlm@jgcg.com or John P. Davis, III, at jpd@jgcg.com.

A link to the proposed rule follows:
http://www.courts.state.pa.us/Index/SupCtCmtes/CivilRulesCmte/rec186civ.pdf