What Is Cy Pres Doctrine?
The term cy pres doctrine refers to a legal concept that gives courts the power to interpret the terms of a will, gift, estate, or charitable trust. This doctrine becomes active if there are issues with carrying out the intended wishes or conditions of the original document or if they can't be legitimately interpreted or legally performed. Once in effect, it gives the court the flexibility to understand the donor or testator's perceived intent and implement their wishes.
- The 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 began 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.
- Cy pres is French for as close and is short for cy pres comme possible, or as close as possible.
- The intentions of a will, estate, or trust would be deemed null and void without the cy pres doctrine.
Understanding the Cy Pres Doctrine
The term cy pres is derived from the old French phrase, cy pres comme possible, which translates to as close as possible. The term is used in the legal field to suggest that the wishes of a donor or testator be carried out as closely as outlined, whether that's in a will or part of a charitable trust or estate.
When legal issues arise surrounding the distribution of funds making it impossible for whatever reason, the document or trust may become null and void. For instance, if a charity fails and can no longer function or fulfill its objectives, court action may be necessary. Courts can use the cy pres doctrine to save it "from failing."
Under the cy pres doctrine, courts can make their own interpretations to ensure that the desires of a donor, charitable trust, estate, or will are carried out as closely as possible, even if certain changes must be made. For instance, the Internal Revenue Service (IRS) states that a court may "may substitute another charitable object which is believed to approach the original charitable purpose as closely as possible" in the case of a charity.
Cy pres is a legal concept that is part of common law.
Most class action lawsuit settlements find their way into a trust that is created to distribute the awards. The distribution of the windfall may not be distributable, which is something that happens frequently happens with a lot of settlements. In some cases, claimants may not make their claims or the award amount per claimant is too small to be distributed to each.
These undistributed funds are placed into a cy pres award and allocated to use further. The use of the cy pres doctrine to distribute settlement funds began 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.
For instance, let's say a number of individuals file a class-action lawsuit against a tobacco company and the court rules in their favor, awarding them damages. The tobacco lawsuit settlement would flow to the next best charity which promotes tobacco-free lifestyles. Without the use of the cy pres award, unused funds could end up being converted into state funds or even return to the defendant of the class action case—in this case, the tobacco company.
Real-World Example of Cy Pres Doctrine
John Marshall Law School's Pro Bono Litigation Clinic in Chicago was given $125,000 in cy pres funds in December 2018. 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 allowed 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.”
What Is the Purpose of the Cy Pres Doctrine?
The purpose of the cy pres doctrine is to allow courts the ability to enforce the wishes outlined in certain legal documents and in certain accounts as closely as possible to the original interpretation. The doctrine comes into play in order to avoid nullifying the document or account, whether it's a trust or a will.
When Is Cy Pres Most Commonly Used?
There are instances where certain legal documents or account setups, such as wills and trusts, can no longer be interpreted or distributed. At this point, it is considered null and void. This is where cy pres commonly comes into play. Cy pres allows courts to make their own interpretation and fulfill the wishes outlined as closely as possible.
What Does Cy Pres Mean Literally?
Cy pres is French for as close. It's short for the French term cy pres comme possible, which literally means as close as possible.