2-807.Residual funds in a common fund created in a class action.

Class action settlements and judgments sometimes leave money on the table — checks that go uncashed, claims that go unfiled — after everyone who is supposed to get paid has been paid. Section 2-807 calls this leftover money “residual funds” and tells the court where it must go once class member claims, attorney's fees and costs, and any agreed reversion to the defendant have all been covered. It must be distributed to one or more “eligible organizations,” defined as not-for-profits that have existed and held federal tax-exempt status under Section 501(c)(3) for at least three years, that comply with Illinois's charitable-registration laws, and whose principal purpose is providing services eligible for funding under the Illinois Equal Justice Act — in practice, organizations that support legal aid.

The statute treats settlements and judgments a little differently. An order approving a settlement that creates a common fund must set up a process for administering the settlement and must provide for residual funds to go to eligible organizations, but the court can approve sending up to half of those residual funds to other nonprofit or public-good organizations instead, if it finds good cause to do so. A judgment for the plaintiff that creates a common fund carries the same basic obligation to send residual funds to eligible organizations, without that settlement-specific flexibility.

Two limits bound the statute's reach. It does not apply to any class action against the State of Illinois or any of its political subdivisions. And it applies to actions filed on or after the effective date of the amendment that added it, plus actions that were already pending on that date but had not yet received a court order preliminarily approving a proposed class settlement.