Structured Settlements 4Real®Blog 2026

by John Darer® CLU ChFC MSSC CeFT® RSP CLTC

Steven A. Saltzburg, Wallace and Beverly Woodbury University Professor of Law at George Washington University has issued a “mud-stirring” opinion letter on February 13, 2006 entitled “Use of Structured Settlement Experts by Plaintiffs’ Counsel“. Erwin Chemerinsky,  at the time of publication Professor of Law at Duke University (2019 Dean at Berkeley Law), has “seconded” him in another written opinion. Both opinions, addressed to the Academy of Catastrophic Injury Attorneys are believed to be used as part of a debate or presentation at the winter meetings of the American Trial Lawyers Association (“ATLA”) in session this week in Hawaii. These opinions are critiqued in today’s entry.

Saltzburg suggests that reasonably competent plaintiffs’ counsel are not aware that the structured settlement expert that they engage may be compensated by agreeing to a split of commissions earned on the placement of a financial product as compensation for services with the defendant’s expert. He suggests that plaintiffs’ counsel are ethically obligated to take steps to prevent such a deal absent the client’s informed consent.

Plaintiff Lawyers Engage Structured Settlement Experts

With regard to Saltzburg’s first point I respectfully disagree.

• First, from my personal experience, most plaintiff attorneys who have experience engaging a structured settlement expert do already understand how he or she gets paid.
• In fact many plaintiff attorneys demand that their agent or structured settlement expert be involved in the resolution of the case.
• It is also very common for structured settlement experts for both plaintiff and defendant to be on hand at a mediation. with knowledge of the parties.
• Those that are “newbies” to how structured settlements work will, early on in the conversation, be smart enough to ask the obvious question, “how do you get paid?” or “what’s your hourly rate?”.

What is an Expert?

Let us now deal with the term “expert”. An “expert” is someone generally having, involving, or demonstrating great skill, dexterity, or special knowledge as the result of experience or training, beyond that of an average person. In a legal context you have “testifying experts” who are relied upon to state an opinion to prove a point at trial. You also have “non-testifying experts” who give advice to attorneys and help them evaluate aspects of their case related to the expert’s specialty. In a structured settlement context the term expert might be used in one of the two above scenarios.

What constitutes an expert in the context of advising on and assisting in the establishment of a structured settlement?

However in most cases the use of the term “expert” may really mean something not covered above. Individuals engaged on behalf of plaintiffs may be engaged in the role of structured settlement broker, structured settlement consultant, structured settlement expert and take on different forms depending on the nature of how the structured settlement broker, structured settlement consultant or structured settlement expert is introduced to the case:

• a Structured Settlement Expert may simply be providing calculations and a report for a fee.
• a Structured Settlement Expert may be retained as a licensed annuity agent or broker and as such would be entitled to receive commissions from brokering or co-brokering of a financial product  (typically an annuity). In fact many plaintiff attorney’s demand that their agent or structured settlement broker be involved as a co-broker in the resolution of a case, with the compensation of their structured settlement broker understood to be shared.
• a Structured Settlement Expert could be a structured settlement consultant or structured settlement broker or structured settlement planner, settlement planner,  financial planner or financial adviser each providing  more comprehensive services than just a product sale.

Certain roles introduce unique variations in both compensation and disclosure practices.

• For example pursuant to the SEC Financial Planning Rule  202(a)(11)-1 (S7-25-099) of the Investment Advisers Act of 1940, which had a compliance deadline of January 31, 2006, an expert (possibly including a structured settlement expert) holding himself or herself out to be a financial planner or adviser may need to be affiliated with a registered investment adviser.
• Prior to, or concurrent with, engagement in an advisory capacity a so-called Form-ADV must be delivered to the client and disclosures must be made by regulation.

In a pure structured settlement consulting or structured settlement brokerage sense compensation is generally by commission

• Who pays the commission? The commission is paid by the life insurance company (“annuity issuer”) issuing the annuity that funds the plaintiff’s or claimant’s structured settlement.
• The commission is a marketing expense of the annuity issuer. From an accounting standpoint commissions are generally amortized (by the annuity issuer) over the life of the annuity. Sometimes the structured settlement expert engaged by the plaintiff is the only expert involved in the case and he or she earns all of the commission.
• In other cases each side has its own expert there is generally a written agreement made between the two experts to split the commissions.
• This is done with the knowledge of their clients and is not unlike a real estate transaction. The defense expert might be considered the “listing broker” and the plaintiff’s expert the “selling broker”. Each is compensated by the annuity issuer for placing the annuity and there is no fee paid out of the claim file or a cash payment made by the plaintiff.

Saltzburg poses the question “so what motivates the plaintiff’s experts to serve as structured settlement advisors, without receiving a fee from, the plaintiffs [or (sic) plaintiff attorneys], without entertaining a reasonable belief they will be able to sell their product to defendants and thereby receive a commission”.

With all due respect to the credentials of Professor Saltzburg, he evidently has no experience either as a structured settlement broker, consultant or expert, settlement planning expert or consultant or one who retains structured settlement brokers, structured settlement consultants or structured settlement experts.

Saltzburg’s opinion is devoid of key details of what really happens

• The defendants do not buy any product from the plaintiff’s expert.
• The defendants’ do not even buy a product from their structured settlement expert!
• In fact only in the absence of a qualified assignment would the defendants buy the “qualified funding asset” in a structured settlement and would Saltzburg’s inflammatory question have any relevance?
• Why is this? Because the structured settlement annuity is purchased by the qualified assignee (or in the case of a non qualified assignment, the non qualfied assignee).

RICO Case filed against Hartford Financial Services Group (“HSFG”) in the United States District Court District of Connecticut 305:CV1681 JCH

• In the RICO case filed against Hartford Financial Services Group (“HSFG”) in the United States District Court District of Connecticut  305: CV1681 JCH  certain allegations in the pleadings actually support the plaintiff’s structured settlement expert being paid by the annuity issuer as being tantamount to being paid by the plaintiff, even under the commission split situation described by Salzburg.
• In the Hartford case the plaintiffs allege short changing and undisclosed rebating under the theory that the parties negotiated a settlement for a specific amount and the Defendant paid its experts out of that amount by way of commissions paid on the portion of that amount which represented the premium for a structured settlement annuity (even though the commissions were paid by the annuity issuer, which in the cases cited in the suit was Hartford Life, part of the HSFG).
• Moving on to another part of his opinion, Professor Saltzburg opines that  “The differences between what the plaintiff’s expert and the defendant’s expert can offer in any particular case are not likely to be great….”. 
• Inasmuch as the experience of Professor Saltzburg, footnoted in the opinion, demonstrates that he has no experience in this area either as a “structured settlement expert”  or as a person who utilizes a “structured settlement expert”,it’s difficult to comprehend how his statement could be considered persuasive. 
• Must I point out the obvious to the professor that there are different skill sets required to perform services for Defendants and Plaintiffs?. Do your research before you write sir!
• Even if you separate experts into the categories of plaintiff, defense or hybrid experts, these structured settlement experts come from a wide variety of backgrounds and have different skill sets that they bring to the table.

Chermerinsky Opinion

• ‘I’ve been silent to Dr. Chemerinsky’s opinion until now but he doesn’t escape, because although given the opportunity to refute, he states he ‘”completely agrees Saltzburg’s conclusions and  recommendations”.
• As stated above the plaintiffs’ pleadings in the Hartford FSG complaint support my opinion (and that of others I’ve spoken to) and refute both Professors.
• With due respect to the Professors, the drafters of the pleadings in the Hartford case are also scholars with experience perhaps more relevant to the topic of structured settlements.

I do think that disclosures are good business practice. I regularly use a structured settlement affidavit which sets forth, among other things, how I get paid, what I get paid and by whom and, if commission based compensation is involved, if there is a split of the commissions on the case.

See Structured Settlement Ethics | Why Structured Settlement Affidavit Matters (4structures.com)

Download saltzburg_opinion.pdf

Download chemerinsky_opinion.pdf