STATE HOUSE, Providence – President of the
Senate Dominick J. Ruggerio, along with 24 co-sponsors, today re-submitted
legislation that would encourage court settlements in the event claims are made
as part of the St. Joseph Health Services pension fund bankruptcy case.
The 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. “Should the bankruptcy case
evolve to a point where claims may be made, 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.
“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,” said President
Ruggerio. “They deserve better than to have the rug pulled out from under
them. 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.”
President Ruggerio continued, “I know that
Special Counsel Max Wistow will utilize every legal remedy available to provide
relief for the pensioners. Should claims eventually be made in this case, my
legislation may provide an important tool to achieve the ultimate goal of
making the retirees whole.”
The bill will be referred to the Senate
Committee on Judiciary.