The Philadelphia Personal Injury Law Blog

What Happens to Leftover Class-Action Funds in Pennsylvania?

We've all gotten those odd notices. Some class-action settlement has occurred based on some product that we may or may not have purchased years ago, and we are now entitled to a $0.37 share of the proceeds. A lot of people, especially when the amount is a pittance, fail to claim their piece of the pie.

So, what happens to the left over class-action money?

Well, thanks to the newest rules promulgated by the Pennsylvania Supreme Court, the residual funds from a class action award or settlement should now go towards providing legal services for low-income residents of the state, reports the Pennsylvania Record.

In the past, the trial judge had the discretion to decide what would happen to the leftovers. Now, with the new rule set to kick in on July 1st, half of the funds would be guaranteed to go to the IOLTA Board (which provides funding for low-income legal services) and the other half would either also go to the IOLTA board, or it would go to an organization that promotes the interest of the class action lawsuit’s objectives.

For example, let’s say there is a class action over medical conditions resulting from coal mining in Pennsylvania. The suit happens, money is paid out, and there is a couple hundred thousand dollars left. Half goes to the IOLTA board, which then distributes it to legal aid societies in Pennsylvania. The other half would go to an organization that deals with Black Lung, such as the greatest law school ever’s Black Lung Clinic. (Yes, that was a shameless plug.)

Even in thriving economies, legal aid societies often struggle to find the funding to provide adequate legal services to low income residents. These societies provide important services, such as custody disputes, and landlord-tenant disputes, to those who otherwise could not afford legal representation. Needless to say, a bad economy has made funding even more uncertain.

This innovative solution, which has also been adopted by a few other states, should ensure a steady stream of funding for these essential services. That way, we all win.

Related Resources: