Pennsylvania Rule of Civil Procedure 229.1, effective July 1, 2004, requires a Defendant to deliver settlement funds to the attorney for the Plaintiff (or to the Plaintiff if unrepresented) within twenty (20) calendar days from receipt of an executed Release.  Where Court approval of the settlement is required, Rule 229.1 is not operative until the settlement is so approved. Pa.R.C.P. 229.1.(c).  Failure to provide the settlement funds within the twenty (20) day time period may result in sanctions. 

A Plaintiff seeking to impose sanctions on a Defendant pursuant to this Rule shall file an Affidavit with the Court attesting to the non-payment, accompanied by a document evidencing the terms of the Settlement Agreement, the executed Release, a receipt reflecting delivery of the executed Release and a receipt reflecting delivery of the executed Release more than twenty (20) days prior to the date of filing the Affidavit. Pa.R.C.P. 229.1.(e).  A response to the Motion is required within twenty (20) days of the filing of the Motion for Sanctions. 

If the Court finds the Defendant violated the twenty (20) day Rule, and there is no material dispute as to the terms of the settlement or the terms of the Release, the Court “shall impose sanctions in the form of interest calculated at the rate equal to the prime rate as listed in the first edition of The Wall Street Journal published for each calendar year for which the interest is awarded, plus one percent, not compounded, running from the twenty-first day to the date of delivery of the settlement funds, together with reasonable attorney’s fees incurred in preparation of the Affidavit.”  Pa.R.C.P. 229.1.(g). 

The Rule permits parties to agree in writing to modify or waive the provisions of the Rule.  Pa.R.C.P. 229.1.(d.).  Timely forwarding of settlement proceeds is essential to avoid sanctions under this new Rule and the potential additional costs incurred for attorney’s fees. Last, the Rule does note Plaintiff’s requirement to file a Discontinuance or deliver a Discontinuance to the Defendant upon receipt of the settlement funds.  It does not, however, provide for the award of sanctions for failure to do so.