Rule 229.1.Settlement Funds. Failure to Deliver Sanctions.

Adopted June 7, 2004 · Not amended since adoption · Last verified June 30, 2026

In one sentenceRule 229.1 requires a settling defendant to deliver the settlement funds to the plaintiff within twenty days of receiving an executed release, and lets a plaintiff who is not paid on time invalidate the settlement or seek sanctions in the form of interest and the attorney’s fees of preparing the demand.

Full Text of Rule 229.1

Text sizeJump to: (a) (b) (c) (d) (e) (f) (g) (h)

(a) As used in this rule, ‘‘defendant’’ means a party released from a claim of liability pursuant to an agreement of settlement; ‘‘plaintiff’’ means a party who, by execution of a release pursuant to an agreement of settlement, has agreed to forego a claim of liability against a defendant. The term includes a defendant who asserts a counterclaim; ‘‘settlement funds’’ means any form of monetary exchange to a plaintiff pursuant to an agreement of settlement, but not including the annuity or future installment portion of a structured settlement.

(b) The parties may agree in writing to modify or waive any of the provisions of this rule.

(c) If a plaintiff and a defendant have entered into an agreement of settlement, the defendant shall deliver the settlement funds to the attorney for the plaintiff, or to the plaintiff if unrepresented, within twenty calendar days from receipt of an executed release.

(d) If settlement funds are not delivered to the plaintiff within the time required by subdivision (c), the plaintiff may seek to

(1) invalidate the agreement of settlement as permitted by law, or

(2) impose sanctions on the defendant as provided in subdivision (e) of this rule.

(e) A plaintiff seeking to impose sanctions on the defendant shall file an affidavit with the court attesting to non-payment. The affidavit shall be executed by the plaintiff’s attorney and be accompanied by

(1) a copy of any document evidencing the terms of the settlement agreement,

(2) a copy of the executed release,

(3) a copy of a receipt reflecting delivery of the executed release more than twenty days prior to the date of filing of the affidavit,

(4) a certification by the attorney of the applicable interest rate,

(5) the form of order prescribed by subdivision (h), and

(6) a certification by the attorney that the affidavit and accompanying documents have been served on the attorneys for all interested parties.

(f) Upon receipt of the affidavit and supporting documentation required by subdivision (e), the defendant shall have twenty days to file a response.

(g) If the court finds that the defendant violated subdivision (c) of this rule and that 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 attorneys’ fees incurred in the preparation of the affidavit.

(h) The affidavit shall be accompanied by an order in substantially the following form: (Caption) ORDER AND NOW, , upon consideration of the affidavit of , attorney for , and the (Plaintiff) exhibits thereto, and upon a finding that payment was not made within twenty days of receipt of the executed release in the above captioned action, it is ORDERED that, in addition to the settlement funds of $ , pay forthwith interest at the rate of % (Defendant) on the aforementioned settlement funds from the twenty-first day to the date of delivery of the settlement funds, together with $ in attorneys’ fees. Judge

End

Plain-English Summary

This rule puts a deadline on paying a settlement. Once a plaintiff signs and returns a release, the defendant must deliver the settlement funds to the plaintiff’s attorney, or to an unrepresented plaintiff, within twenty calendar days. The parties may agree in writing to change or waive these terms.

Late payment has consequences. The plaintiff may move to invalidate the settlement, or seek sanctions by filing an affidavit of non-payment with supporting documents; the defendant then has twenty days to respond. If the court finds a violation and no real dispute about the terms, it imposes interest — the prime rate plus one percent, running from the twenty-first day to the date of delivery — together with the reasonable attorney’s fees of preparing the affidavit.

Frequently Asked Questions

How long does a defendant have to pay a settlement?

Twenty calendar days from receiving the executed release. The parties may agree in writing to a different arrangement.

What can a plaintiff do if the settlement is not paid on time?

Move to invalidate the settlement, or seek sanctions by affidavit. If the court finds a violation and no real dispute about the terms, it must impose interest at the prime rate plus one percent from the twenty-first day to delivery, plus the attorney’s fees of preparing the affidavit.

Official Note

Official Note: If court approval of the settlement is required, Rule 229.1 is not operative until the settlement is so approved. Upon receipt of the settlement funds, the plaintiff shall file a discontinuance or deliver a discontinuance to the defendant.

Official Note: The interest rate is determined in accordance with subdivision (g) of this rule. The defendant is the party who has failed to deliver settlement funds as required by this rule. The plaintiff is the party who is seeking to impose sanctions on the defendant for that failure.

Amendment History

The provisions of this Rule 229.1 adopted June 7, 2004, effective July 1, 34 Pa.B. 3103.

Source & verification. Rule text, the Official Note, and the amendment history are reproduced verbatim from the Pennsylvania Code, Title 231, the official compilation of rules adopted by the Supreme Court of Pennsylvania. This rule has not been amended since its adoption. Last verified June 30, 2026. · Official text

Also known as: settlement fundsfailure to deliver settlementtwenty days settlementsettlement sanctions