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  • Judgment Against the Government

  • Judgment Against the Government

    Payment and Satisfaction of Judgement Against the Government

    A check in payment of an adverse judgment may be obtained in some cases from the client agency, if it has an appropriation or other source of funds available. Government corporations and "sue and be sued" officials and agencies may have such an appropriation, or a revolving fund, from which payment can be made. Adverse National Service Life Insurance (NSLI) judgments (as distinguished from those which are entered as a result of compromise) are payable by the Department of Veterans Affairs (VA) from insurance trust funds. However, if the loss is due to the extra hazards of war, the VA will pay the NSLI judgment from appropriations. Judgments in Federal Tort Claims Act cases, with few exceptions, are paid with treasury funds after certification by the Department of the Treasury. If the FTCA judgment is based upon the activities of a Federally Supported Health Center, the judgment is paid by the Department of Health and Human Services rather than by the Treasury. Likewise, the Postal Service pays judgments for its torts.

    In a few instances, funds for the payment of a judgment may be provided by an insurer, surety, or indemnitor. Normally, the Civil Division's communication advising that further appellate review will not be sought will provide information as to the method of payment. If payment cannot be obtained from the sources indicated above, payment of final judgments will be made pursuant to 31 U.S.C. 1304. See USAM 4-10.110. In the past, the judgment fund, which pays judgments pursuant to 31 U.S.C. 1304, was administered by the General Accounting Office. Effective June 30, 1996, that authority was transferred to the Office of Management and Budget (OMB) pursuant to 211 of the Legislative Appropriation Act of 1996, and redelegated by OMB to the Department of the Treasury, Financial Management Service.

    In tort actions, parties in addition to the injured plaintiff may have a legal interest in the funds generated by a judgment or settlement. See United States v. Aetna Casualty & Surety Co., 338 U.S. 366 (1949). For example, a workers' compensation carrier may have a lien for insurance payments it has already sent to the injured plaintiff. Any party which is subrogated to an interest of a party plaintiff can separately assert its rights. If the government pays the injured plaintiff the full amount of damages, it may still be liable for payment to the subrogated party for the amount the subrogated party paid out. Therefore, United States Attorneys should design settlement documents and documents for release of judgment so as to extinguish all claims arising from the subject matter of the lawsuit, including not only the claim of the primary plaintiff but also of all parties having a subrogated interest. If necessary, the Department of the Treasury should be reques ted to issue separate checks to insure extinguishment of separate interest.

    National Service Life Insurance judgments are frequently payable in installments over a long period. In such cases, the installments payable to the beneficiary and the beneficiary's attorney will be paid directly (and separately) to them by the Department of Veterans' Affairs. See 38 U.S.C. 3020.

    This information came from a
    US DOJ online article.

    *** Any law, statute, regulation or other precedent is subject to change at any time ***

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