Ruggerio calls for passage of bill encouraging settlements in pension bankruptcy case
STATE HOUSE, Providence – With the filing of class action lawsuits in state and federal court related to the St. Joseph’s pension fund bankruptcy, President of the Senate Dominick J. Ruggerio is calling for passage of legislation he has filed to encourage settlements.
“My legislation is a tool that can encourage faster settlement of claims, making the pensioners whole or as close to whole as possible,” said President Ruggerio. “The beneficiaries of this pension plan, many of whom are my constituents, worked hard throughout their careers and did everything required of them to earn a secure retirement. They deserve better than to have the rug pulled out from under them.”
The Senate President’s joint tortfeasor legislation encourages parties to enter into a settlement. It provides that defendants entering good faith, judicially-approved settlements would not be liable for claims from co-defendants for contribution or equitable indemnity regarding matters addressed in the settlements. The finality of the settlement without fear of a contribution claim from a co-defendant, provides an incentive to settle.
“Last fall, I asked my staff to review any and all potential remedies to assist beneficiaries of the St. Joseph Health Services pension fund,” said President Ruggerio. “This legislation could provide a proven legal strategy that has been used successfully to encourage settlements in other high profile cases in Rhode Island.”
Similar legislation was enacted in 2014 to induce settlements in the 38 Studios litigation, in 2006 to address the Station Fire litigation, and in 1993 to address the DEPCO litigation. In these three instances, it was found that many of the defendants had insurance policies that included what is known as a “wasting policy,” meaning that liability coverage is reduced as defense costs are incurred. In such cases, it is most beneficial to the aggrieved party that settlements be reached quickly, when more liability coverage is available.
“There are very disconcerting irregularities with the way in which this fund deteriorated so rapidly. Reportedly, the pension plan was 90 percent funded only a few years ago. It is extremely troubling that it would slip into receivership so quickly, during a period of economic growth and record financial markets.”
The Senate President’s legislation, 2018-S-2112, passed the Senate in May and is awaiting action in the House of Representatives. The House version of the legislation, 2018-H-8166, sponsored by Majority Leader K. Joseph Shekarchi, is scheduled for House consideration today.
For more information, contact:
Greg Pare, Press Secretary for the Senate
State House Room 314
Providence, RI 02903