What is Cy Pres Doctrine?
Cy pres doctrine is a legal concept that gives courts the power to interpret the terms of a will, gift, or charitable trust. This doctrine will become active if the intended wishes or conditions of the original document cannot be carried out, be legitimately interpreted literally, or legally performed. Cy pres gives the court the flexibility to understand the perceived intent of the donor or testator and implement their wishes.
The term has its origin is an old French phrase, cy pres comme possible which, in translation, means "as near as possible." Cy pres allows the wishes of the creator of a charitable trust, gift, or will to be carried out in many cases. If it were not for this power, there would be instances in which the phrasing in the document would make it null and void, legally, and thus impossible to implement.
Key Takeaways
Cy pres doctrine is a legal concept that gives courts the power to interpret the terms of a will, gift, or charitable trust.
The use of the cy pres doctrine to distribute settlement funds begin in 1986 so that unused funds could flow to the next best beneficiary.
Undistributed money from either reason is placed into a cy pres award and allocated to use further.
Class Action Lawsuits and Cy Pres Awards
The settlements from most class action lawsuits go into a trust created to distribute the awards. In some cases, all of the property or estate of the trust may not be distributable. The inability to allocate funds is frequently the case with class action lawsuits and settlements. Often claimants do not make their claim. In other cases, the award amount per claimant is too small to be distributed to each.
Undistributed money from either reason is placed into a cy pres award and allocated to use further. The use of the cy pres doctrine to distribute settlement funds begin in 1986 so that unused funds could flow to the next best beneficiary. The next best recipient is often a charitable trust which closely resembles the original reason for the class action suit. As an example, a class action settlement for a tobacco lawsuit would flow to the next best charity which promotes tobacco-free lifestyles. Without the use of the cy pres award, unused funds could end as state funds or even return to the defendant of the class action case.
Real World Example
In December 2018, Chicago's John Marshall Law School's Pro Bono Litigation Clinic was given $125,000 in cy pres funds. These funds came from a class action Wage Act case involving a class of workers in a claim under the Illinois Wage Act, who were represented by graduates of John Marshall. The cy pres money will allow the Pro Bono Litigation Clinic to start accepting Wage Act cases. “The Clinic is honored and thankful for being selected as the recipient of the cy pres award,” said Professor J. Damian Ortiz, clinical professor and director of Pro Bono Litigation Clinic in a press release. “We believe that the cy pres award is an invaluable way to advance the interests of laborers and employees throughout Illinois. The Clinic will be able to provide employees legal representation, education, self-claim filings, and continuous legal services.”
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