In this weeks edition of Speaking of Settlements I follow up on my previous commentary where I discussed some of my concerns regarding an industry push to curtail the markets available to underwrite single claimant qualified settlement funds. In the prior commentary I took to task the defense brokers and our profession's unfortunate tendency to force market changes on pro-plaintiff products and access to professionals with out a open and transparent dialogue on the consequences of those actions.
Single claimant QSF, Fools Gold for plaintiff attorneys
This week I discuss the often careless, and frequently dishonest, method's certain plaintiff experts have used to try and justify the use of a single claimant case to settle a personal injury matter, when often the only true motivation for the QSF is simply taking control of the structured settlement funding process away from the defendant. The plaintiff experts who push the single claimant settlement fund strategy as an effective planning tool are selling "fools gold" to their attorney clients and thanks to recent changes at the life markets, now run the risk of profound professional embarrassment by continuing this tactic.
As someone who has worked exclusively as a plaintiff settlement expert for over 25 years now, I have a personal understanding of why plaintiff brokers and trial lawyers feel so aggrieved about the process of structured settlements and what they frequently view as excessive defense control and interference in the process. I get it, we have all been strong armed out of cases and our clients have been forced into life markets and structures by brokers who they never chose to work with. However, the answer to that process should not be the careless and casual use of the IRC 468B qualified settlement fund process so as to add additional expense, process and potential IRS audit scrutiny to the settlement procedure simply so they don't have to split a commission with a defense broker.
As I mention in this weeks commentary, there is plenty of blame to go around for the past, but we can't continue to live in the past, we need to move forward. However, the result of this over reach by plaintiff brokers on single claimant cases has now led to a situation where there are no life companies that will underwrite a structure on a single claimant case, forcing brokers to look at alternative products or approaches, or to go back to their clients and explain how their time and funds on setting up a QSF were wasted.
As I discussed last week, the purpose of a Qualified Settlement Fund should be to administer a multi-claimant case in cost effective and compliant fashion so as to provide the best planning option to MULTIPLE claimants. Single claimant cases should be legal but used on truly exceptional cases, not as a short cut to close defendants out of the process. There is little to be gained by past practices on BOTH sides of this issue and eventually there needs to be a set of industry standards developed and agreed to by all stakeholders or we run the risk of further shrinking our profession in both numbers of brokers, life markets and premium written.
