by John Darer CLU ChFC MSSC CeFT RSP CLTC
Plaintiff attorneys should retain a settlement planner or consultant and make every effort to do so well ahead of any deadlines whenever feasible.
The dynamic nature of the business and the sometimes life impacting significance of financial decisions to be considered, means that you and your client need to be adequately prepared and informed
- Consider the individual or individuals you select to work with based on skill sets, credentials (such as Registered Settlement Planner) and experience .
- Ignore bogus “legal malpractice” scare tactics that are prevalent in my industry’s advertising to trial lawyers.
Dissecting Scary Settlement Planning Claims
1. “Not all structured settlement brokers have the interest of your client in mind”
Comment: TRUE
2. “It’s not at all uncommon for the defense to argue to have their own Structured Settlement Planner handling the settlement”
Comment: TRUE, but contrary to the implication of such solicitation, that DOES NOT preclude you from retaining your own structured settlement planner or consultant at no extra cost.
3. Not surprisingly, these arrangements often favor the interest of the defense over the interest of your client. (See our article, “Three Cases Every Plaintiff Attorney Should Know” for details.)
Comment: The “novice” in question is referring to cases that highlight alleged old business practices. Some of these documents are pushing a decade old. In real estate there is a buyer’s broker and seller’s broker. Over time you will learn who the ethical ones are. There are many credible players who work with both defendants and plaintiffs (although not on same case of course) just as there are lawyers who do. Furthermore, I can cite examples where the consultant selected by the plaintiff lawyer has not acted in the best interest of his/her clients, whether through inexperience or something else.
4. Moreover, these arrangements result in significantly greater long-term liability for plaintiff attorneys.
Comment: The oft cited Grilllo v Pettiete matter was significant, but why hasn’t any “fear mongerer” been able to cite any more recent cases?
5. The following questions will help attorneys assess their own long term risk:
a. Are you failing to retain your own financial expert?
Comment: Good question, might want to expand to “settlement planning expert”.
b. Are you neglecting Medicare Set Aside Accounts?
Comment: Better put, “are you aware of the Medicare Secondary Payer Act and your responsibilities under it?”
c. Are you releasing your client’s medical records to defendants without consideration of HIPAA requirements?
Comment: By all means consider HIPAA requirements. Yet some argue that the plaintiff attorney should use the HIPAA rules to restrict the use of medical records for medical underwriting of structured settlement annuities that may be offered to your client so that the defendants cannot abuse your clients.
Read my January 14, 2008 post “HIPAA Release Scare Tactics by Settlement Professionals Have No Place on New York Personal Injury Cases“
d. Are you inviting taxable confidentiality clauses into settlement agreements?
Comments: Dennis Rodman (left) retired from the NBA in 2000. More than a decade later the January 2
1, 1997 “confidential settlement” of a case involving the stomping of a cameraman during a January 15, 1997 NBA game resurfaces.
Eugene Amos Jr. v. Commissioner of Internal Revenue, the United States Tax Court stated that “if a settlement agreement lacks express language stating what the amount paid pursuant to that agreement was to settle, the intent of the payor is critical to that determination.” 2003 WL 2289795 (U.S. Tax Ct, 2003)
Intent of Payor=Intent of Defendant, Insurer (or Qualified Settlement Fund Administrator/Trustee, in some cases).
5. Are you unaware of tax consequences in taxable damage cases?
Comment: Weak “tantalizer” that only scratches the surface and most likely will result in a a reader thinking “well.duh!” . Better put, “are you aware of the tax implications of differing methods of settlement in cases where all or a portion of the case involves taxable damages? Wouldn’t it make sense to explore the best option for you (your client)?”
- The same beleaguered cast of characters continue to play the scare game. I’ve identified them time and time again.
- Perhaps undisclosed to their clients, some of these “plaintiff exclusive” types are even setting up defense arms of their companies at the same time they are scaring you into working with them. DON’T BE SPOOKED!
- Work with quality settlement consultants and settlement planners based on skill set and verifiable credentials and avoid the “horror show”
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