Current value, future value, inflation, discount rates, nominal rates, effective rates … figuring out what’s what in a structured settlement sale can be as clear as mud. Yet judges, charged with determining what is fair and reasonable, must decipher the numbers they are given in a proposal by a factoring company, dissect them to determine what fees and costs as being charged, and decide whether the monies offered now are reasonable in light of the future value of the payments not yet received.
Not an easy task. This could be why many unsavory deals still get pushed through in spite of the Structured Settlement Protection Act. And, the same tactics are being used on plaintiffs who are being convinced to sell their structures when it is a bad deal for them.
What can be done? As lawyers, if we spend even five minutes talking about the “what ifs” at settlement, then maybe plaintiffs would take away a nugget of knowledge that would give them pause if they were ever in the situation where they were contemplating selling their structure. If plaintiffs understand that they need to have some knowledge of these financial terms and, most importantly, get multiple bids should they ever decide they must sell, then, at least, they will be giving themselves the chance for a better deal.
As lawyers we can also start to raise the issue with Judges we know or see to build awareness organically. As lawyers we have unique access to the courts, and we should take the time when the opportunities arise to encourage Judges to make sellers obtain multiple bids. Education and information is power, and we as advocates for plaintiffs should embrace and encourage competition to get former plaintiffs better results. By doing so, we can make a difference.
Hank Didier is co-founder of Vantage Capital Consultants, a purchaser of structured settlements formed by plaintiff’s attorneys to give sellers a better choice.