Pa. needy to receive $4.1 million from residual class action settlement funds

By Jon Campisi | Sep 9, 2013

Low income Pennsylvanians in need of legal assistance will soon receive a

Low income Pennsylvanians in need of legal assistance will soon receive a

$4.1 million gift, of sorts, thanks to a civil procedure rule change that directed residual funds from civil class actions toward those who have trouble affording their own private attorneys.

The Pennsylvania Supreme Court announced late last week that the $4.1 million distribution came out of excess funds from a $5.6 million verdict stemming from a product liability case against carmaker Kia that originated in the spring of 2005 at the Philadelphia Court of Common Pleas.

The case involved a class of purchasers of Kia Sephia vehicles who claimed they experienced premature brake wear as a result of a defective design of the braking system.

After payment was rendered to located class members, and following the awarding of attorneys’ fees and other legal expenses, what remained were residual funds of about  $4.1 million.

Last summer, the state’s high court instituted a rules change that directed how money leftover from civil suits after the plaintiffs, lawyers and expenses have been paid is to be distributed, according to the Administrative Office of Pennsylvania Courts.

The Interest on Lawyers Trust Account Board, which helps increase access to civil courts for financially challenged commonwealth residents, was designated by the Supreme Court last July to receive at least 50 percent of the unclaimed funds from class action settlements, according to the AOPC.

Prior to the rule change, the trial court judge had discretion over where to allocate the residual funds from such litigation.

The other half of the money can also be designated to the Interest on Lawyers Trust Account Board or to another organization that promotes the interests of a class action lawsuit’s objectives, the AOPC stated.

In the case involving Kia Motors, the remaining 50 percent of the residual funding will be turned over to Community Legal Services of Philadelphia.

“Only one in five low income Pennsylvanians with a critical legal problem is likely to get legal help from any source,” Supreme Court Chief Justice Ronald D. Castille said in a statement provided by the AOPC. “While half of those who apply for legal aid are turned away, many others never even apply. And that’s because many legal aid organizations can only do so much because of resource restraints.

“The new rules adopted by the Supreme Court last year,” Castille continued, “direct that unclaimed funds like those remaining in the Kia distribution will go to help low-income people tackle civil cases that multiply in difficult economic times, such as foreclosure, domestic violence and the issues resulting from job loss.”

Jim Schwartzman, who chairs the Interest on Lawyers Trust Account Board, said that the millions in residual funding from the Kia Motors case couldn’t have come at a better time for his group.

“With funding cuts, our ability to help those in need of civil legal assistance has been severely hampered,” Schwartzman said in a statement. “Although this is a one-time boost, it is a welcome boost, and we thank the Supreme Court and especially Chief Justice Castille for their leadership and creative solutions to help vulnerable Pennsylvanians with their legal matters.”

A number of other states, including Illinois, Massachusetts, North Carolina, Tennessee and Washington, have approved similar civil court rules changes that require or allow residual money from class actions to go to charities, legal aid providers or other nonprofit groups, according to the AOPC.

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