This one is designed to make the settlement of lawsuits against a governmental unit more transparent. The bill says that if the settlement is for $30,000 or more, and is funded by tax revenue, or the proceeds of an insurance policy purchased with tax revenue, the settlement agreement cannot require the plaintiff to keep quiet about it.  Any settlement in violation of this statute is “void and unenforceable.”

This will be an interesting one for the lawyers to deal with. It is very common for settlement agreements to include a confidentiality provision.  We read in the newspaper that the school district settled the case, while denying any wrongdoing, and that the terms of the deal are not to be disclosed, except as might be required under the Public Information Act.  Settlement agreements in the future will have to take this new law into account.

The statute goes into effect on September 1 of this year, but will not apply to lawsuits that are pending at that time, or filed shortly thereafter.   The law says that it applies “only with respect to a claim or action that is based on a cause of action that ACCRUES after the effective date of this Act.”  (Emphasis added).

DAWG BONE: WE CONTINUE TO PROMOTE GREATER TRANSPARENCY.

Tomorrow: Toolbox Tuesday!!