Understanding Illinois’ New Settlement Statute

Illinois recently enacted a new settlement statute, with the goal of alleviating some of the hassles of the personal injury practice. 

We’ve all had cases that have settled but still sat on the shelf for weeks or months due to insurance company delays or lien issues. My partner taught me very early on that a plaintiff’s lawyer’s work isn’t nearly done when the case is settled. 

735 ILCS 5/2-2301 to the rescue*

*to the rescue like someone who calls 911, not someone who actually helps beyond that. It’s a nice statute, but it’s not wearing a cape and flying in to save anyone.

So what does the new statute do?

          1. Defendants must tender a release within 14 days of written confirmation of the settlement.

• Practice point – after a settlement is agreed to orally, confirm it right away in writing or email. That gets the clock ticking.

          2. A settling defendant must pay all sums due within 30 days after the tender of the executed release.

• Note that “tender” of the release means personal delivery or delivery with return receipt. In other words, drop it off or send it certified mail.

          3. The plaintiff may protect liens/subrogation interests by agreeing to hold the amount of the claimed liens/subrogation interests in his trust account until the lien/subrogation interest is resolved.

• Why is this important? In theory, it means that if the plaintiff’s attorney sends the defendant a letter (along with the letter confirming settlement if you’re really on the ball) agreeing to protect those third party interests, there should be no need for anyone else’s name to appear on the check. Likewise, a plaintiff’s attorney can get the ball rolling with the settlement check while continuing to negotiate any liens or subrogation interests.

The scuttlebutt at the moment is that some insurance carriers are refusing to abide by the new statute – especially where Medicare is involved. The statute provides for costs and interest if the defendant does not pay in time. Not sure if that provides enough bite to keep the insurance companies from doing what they normally do, but at least it’s another arrow in the quiver. 

(Howard Zimmerle is a trial lawyer concentrating in personal injury, car accidents, medical malpractice and workers compensation. He practices in Davenport, Rock Island, Moline, Bettendorf, and most of Iowa and Illinois. He can be reached at 309-794-1660 or hzimmerle [at] mjwlaw.com)