New Law on the Horizon for Illinois Employers Settling Tort Claims

On January 1, 2014, a new section of the Civil Practice Law, “Settlement of claims; payment” (735 ILCS § 5/2-2301), will take effect. The Illinois legislature passed the law in an effort to expedite the payment process in personal-injury and property-damage claims and to prevent defendants in certain civil suits from delaying payment after agreeing to settle a claim.

Specifically, the new law will require certain non-governmental defendants “in a personal injury, property damage, wrongful death, or tort action involving a claim for money damages” to deliver a release to the plaintiffs within 14 days after written confirmation of the parties’ settlement agreement. Then, within 30 days after a plaintiff returns the executed release, the defendants are required to pay all sums due under the agreement.

The law is expected to impact Illinois employers that settle retaliatory discharge and other tort claims that arise in the employment context such as tortious interference, defamation, and infliction of emotional distress. Employers should be cognizant of these new deadlines when settling such state law tort claims. For more details on the requirements of the law and for our suggested best practices for employers involved in civil settlements, see “New Illinois Legislation Requires Settling Defendants in Certain Civil Litigation to Promptly Deliver Releases and Payments to Plaintiffs.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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