by John Darer CLU ChFC MSSC CeFT RSP CLTC
New York’s Periodic Payment of Judgments Statutes have been in place since the mid-1980s
Simple settlement math illustrates that during time periods where there is an inverted discount rate phenomenon, creates a net growth rate and amplifies New York jury verdicts for pain and suffering IN EXCESS OF the nominal amount of the jury verdict for pain & suffering and possibly other elements of damages.
- At the time of publishing the 10 Year US Treasury rate is 2.28%
- Pain & Suffering Gets crunched into 10 years*
- The statutory growth rate is 4%
- Growth rate minus discount rate is 4 minus 2.28 which equals 1.72. The growth rate exceeds the discount rate so we have a NET GROWTH RATE
- $1,000,000 inflated by 1.72% for 10 years is $1,165,888.89, a difference of $165,888.89
- When you add 9% statutory interest to the equation there is a significantly different picture to the nominal verdict numbers.
- Note that there may be other offsets in an actual case. This is meant to illustrate the concept of a net growth rate and why/when it occurs.
Having a settlement expert who understands New York structured judgments can be invaluable for New York based lawyers and their clients
New York City mediations (cases pending in Bronx, Kings, Richmond, New York and Queens counties, mediations in Long Island, Westchester, Syracuse, Binghamton, Albany and other parts of New York State
Note that in an actual Article 50-B calculation there would need to be an accounting for any applicable collateral sources and applicable offsets.
*for the purpose of this post, the illustration is for a general liability case. The calculation varies for a case involving medical, dental or podiatric malpractice