Litigation

Plaintiff attorneys should use caution when encountering a latter day defense tactic that still  occasionally pops up in negotiations, involving pressuring the plaintiff into a structured settlement with payment terms of only a few years in the current environment.  Such moves were popular a few years ago. The primary motivation was to help the adjuster get credit and help the settlement broker make a living. Generally the negotiations involved an agreement to structure an arbitrary amount of money a certain way that hold no rhyme or reason when it comes to the plaintiff's needs.

If there's something of value to offer that's one thing.  At one point in time there WAS a value and they will likely be again in the future when interest rates and tax rates rise. But now? Structured settlements under two years duration offer spendthrift protection but little else in today's market. That may mean something to somebody, but the caveat is that it might cost you or your client money. There are other solutions that may offer more in the short term.Take a look at short term Treasury Rates-they stink!

3 month T-Bill  .14%
6 month T-Bill  .20%
1 year T-Bill     .36%
2 year T-Notes  .90%  Source: Bloomberg.com September 13, 2009

Take a structure purchased now that pays a single lump sum on January 15, 2010 and you are looking at an approximate 4.25% less than was put in for you.

Structured settlements are an excellent long term financial planning vehicle. There many applications where it truly has great value.

While it is certainly its prerogative to construct an offer of its choosing, care must be taken by the defense to gain the best understanding it can of the plaintiff's needs. A better understanding leads to more thoughtful, and therefore more attractive offers.