It's common knowledge in legal circles that the majority of civil liability cases are settled before ever reaching the trial phase. There are many reasons for this, including:
-- The high cost of putting on a trial
-- The logjam of cases that would slow the legal system to a crawl if all cases were set for trial
When a settlement has been reached between the parties, the payments can be made either as one lump sum or stretched out over time in a series of scheduled disbursements. This is often referred to as a structured settlement.
This arrangement can be beneficial in cases where a product liability case results in catastrophic injuries to a plaintiff. Structured settlements allow a defendant's insurance company to fund an annuity to produce an ongoing revenue stream of income for the duration of the structured settlement.
Some good reasons to accept a structured settlement include:
-- Avoiding tax liabilities that can affect lump sum payments. Annuity funds remain tax-free if the plaintiff is not the one controlling the funds.
-- Annuities are professionally managed by financial planners to assure the availability of funds for future expenses.
-- Many plaintiffs who accept lump sum payments blow their money frivolously and have nothing left within only a few years. They may not be able to return to work and have to rely on government benefits to get by. Structured settlements preserve funds for all stages of a plaintiff's disability.
-- Annuities can be designed to meet specific needs and future contingencies.
-- Portions of the settlement can be set aside in the event that future medical advances or treatments are designed to address the plaintiff's injuries or disabilities.
-- A combination lump sum/structured settlement can be implemented to pay off rehab and medical bills or to repay debts accrued during the pendency of the litigation.
If you are wondering if a structured settlement is a good idea for your product liability case, your personal injury attorney can address your concerns.
Source: Findlaw, "Structured Settlements: Pros and Cons," accessed Sep. 04, 201