COMMITTEE ON CIVIL PRACTICE LAW AND RULES

REPORT NO.  13                                                                                                  March 31, 1999

S.  3008                                                                                                          By:   Senator Leibell
A. 5492                                                                                                          By:   M of A Stephens
                                                                                                Senate Committee:  Codes
                                                                                            Assembly Committee:  Judiciary
                                                                                                       Effective Date:  Immediately
 

AN ACT to amend the civil practice law and rules, in relation to interest on settlement of action or claims by infant, judicially declared incompetent or conservatee

LAW AND SECTION REFERRED TO:  CPLR 1207

REPORT PREPARED BY THE COMMITTEE ON CIVIL PRACTICE LAW AND RULES(#4)

THIS BILL IS DISAPPROVED

        The purpose of this proposed legislation is to allow for the payment of interest on settlement claims by infants, incompetents, or conservatees.  The interest would run from the date of a settlement agreement to the date of entry of an order or judgment if the court determines that the settlement process after the agreement was not timely or did not proceed in a reasonable manner and worked a hardship on the ward.  The sponsor's justification for the bill is that a significant value is lost due to the long period of time it takes to obtain approval of infant compromise settlements in personal injury actions.

        It is the Committee's view this legislation is ill conceived since it unfairly penalizes defendants who, except in very limited circumstances (CPLR 1208 [d]), have no control over the settlement process as they lack standing to seek judicial approval of a proposed infant settlement (Alexander, Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR 1207 at 353).  Further, by conditioning the payment of interest upon a showing that the settlement process did not proceed in a timely or reasonable manner, the bill invites further litigation with its attendant costs that would likely consume the interest paid on the settlement.
 

For the foregoing reasons, this bill is DISAPPROVED.

Person who Prepared the Report:  J. David Burke, Esq.

Chair of the Committee:  Paul H. Aloe, Esq.