by John Darer CLU ChFC MSSC CeFT RSP CLTC
New York Structured Settlement Protection Act
The New York Structured Settlement Protection Act (NY SSPA) was enacted to protect structured settlement consumers, namely structured settlement annuitants
In order for structured settlement annuitants to be protected, such laws must be enforced.
Information continues to develop in jurisdictions nationwide about the consequences of weak enforcement of these acts. Settlement purchasers are aggressively exploiting these weaknesses.
- A consistent factor observed in all instances of forum shopping and annuitant churn cases is the absence of the Payee in court proceedings.
- In such cases the judge, “the final frontier”, makes a decision solely “on the papers” which includes an affidavit from the seller.
- The problem is that the affidavit may have been written by the purchaser or the attorney for the purchaser and have been placed in front of the seller as a “sign here” among a stack of other transfer paperwork.
In 2011, New York State’s General Obligations Law 5-1705 was amended to include section 5-1705(e), which mandates that “On the hearing, the payee shall attend before the court unless attendance is excused for good cause.”
This morning I heard from a New York structured settlement payment seller who was prepared to go to court and was “prepared” by JG Wentworth. He was told by the lawyer for JG Wentworth that the court in Queens County said that he did not have to appear and he wanted to know if that was ok. The seller was not a quadriplegic or serving in the military and he was ready, willing and able to appear.
I understand through my research, that judges in New York, who have traditionally been among the best in the country at protecting structured settlement annuitants*, are increasingly not enforcing the mandatory hearing. The question is why?
In October 2013, news broke about a slew of forged Court Orders “approving” structured settlement transfers that allegedly involved a now former paralegal of the New York City law firm of Paris & Chaiken. It has been opined that enforcing NY GOL 1705(e) as to having the Payee appear would have prevented the fraudulent transfer orders from happening. Peter Vodola had a nice write up on his Secondary Insurance Market Blog. My November 2013 posts about the Paris & Chaikin New York Structured Settlement Transfer Order Scandal of 2013 here and here
The best way to mitigate the forum shopping is to mandate and enforce in person court appearances for sellers all across the country. In my opinion. a person should not be able to have a court appearance waived if they have waived independent professioonal advice. As I posted recently, I am receiving call after call from people, including New York residents, who have been forum shopped to Florida and churned to their financial peril.
* for an example of the good, see this report Bronx Judge Hunter Nixes Vulture Snack on Structured Settlement Carcass January 15, 2009
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