Illinois Gov. Pat Quinn has signed a bill into law that would require defendants in most civil cases to submit to plaintiffs an executed release within 14 days of a written settlement agreement. The new law goes into effect on Jan. 1, 2014.
Significantly, the new law will require a defendant to pay all of the settlement amounts to the plaintiff within 30 days of the date that the signed release is tendered to the defendant. If the defendant fails to timely pay the money required by the agreement, the plaintiff can return to court on a motion for added costs and interest.
The law will create a new “Part 23” of the Illinois Code of Civil Procedure to be titled “Settlement of Claims; Payment” (735 ILCS 5/2-2301).
The bill was sent to the governor on June 28, 2013 after the Illinois Senate passed it on a 34-21-1 vote on May 15, 2013. The House approved the bill by a margin of 67-50-1 on May 28, 2013.
The new act will apply to any “personal injury, property damage, wrongful death or tort action involving a claim for money damages,” except that it expressly does not govern cases in which governmental entities and state employees are defendants.
According to section (a), when the parties agree to a settlement in such cases, an executed release must be tendered to the plaintiff by the settling defendant within 14 days of written confirmation of the settlement.
In cases where the settlement requires a court approval, section (d) of the proposed law will require the plaintiff to obtain such court approval and then provide the defendant with a copy of the court order certifying the settlement.
The new law will simplify procedures in cases that have settled. Often times plaintiff’s counsel struggles with compliance by settling defendants. This has led many lawyers to bring motions to enforce the settlement and ask the court for attorney fees, court costs and interest. With the motion pending, many defendants then are prompted to comply with the settlement agreement by making payment.
The bill allows a plaintiff to protect a third-party’s right of recovery or subrogation interest by tendering to defendant one of several kinds of written communications defined in the legislation so as to put the defendant on notice of a third-party claim.
These documents will include a release of lien held by an attorney or healthcare provider or a letter from a plaintiff’s lawyer agreeing to hold the full amount of the settlement proceeds in a client trust account pending final resolution of a lien. Liens in cases include Medicare and Medicaid liens as well as hospital, physician and subrogation claims. The law should make the settlement process run much more smoothly.
Kreisman Law Offices has been handling injury cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Mundelein, Lake Forest, Palos Heights, Morton Grove, Park Forest, Antioch, Chicago (Rogers Park), Chicago (Roscoe Village), Chicago (Beverly), Lincolnwood and Tinley Park, Ill.
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