by John Darer® CLU ChFC MSSC RSP
New York State Supreme Court for Bronx County's required "Structure Broker's Affidavit", introduces a new "standard of care" for structured settlements, apparently due to the Court's concerns concerning structured settlement broker participation in factoring.
"11. Neither I nor (Insert name of company) will, without the express consent of the
plaintiff and the prior written approval of this court:
(a) provide any information about this settlement to any
factoring company for any purpose; or
(b) solicit the plaintiff or plaintiff’s family on behalf of any
factoring company for any purpose, including, but not
limited to, the proposed sale of plaintiff’s future periodic
payments, nor will I or (Insert name of company) participate,
assist, promote, or aid in such solicitation by any person, firm,
corporation or entity; or
(c) seek or accept any consideration, financial or otherwise, directly
or indirectly from a factoring company."
If there was no problem why would there be a need for the Supreme Court of the State of New York to introduce this new "standard of care"? Alas, the Court has spoken. If you are an attorney and do business in Bronx County, come into knowledge of "the problem" do you now owe your client, as part of your obligation to protect them, any less "standard of care" because you are prosecuting your client's case in Queens, Kings, Staten Island, New York County, Nassau or Erie County, or elsewhere in New York State?
Points for Plaintiff Lawyers To Consider
Consider that the overwhelming majority of the structured settlement industry has not subscribed to a Structured Settlement Transparency Initiative specifically addressing many of the points that are in item #11 of the Bronx County Structure Broker's Affidavit.
Consider that the National Structured Settlements Trade Association publicly rejected a Structured Settlement Transparency Initiative in a written memorandum to its members. Despite having knowledge of the business practice, the National Structured Settlements Trade Association (NSSTA) failed to come up with an alternative solution. The majority of the structured settlement brokers and settlement planners you encounter will be members of NSSTA.
Consider that it is known within the industry that many structured settlement brokers seek or accept financial consideration for structured settlement factoring transactions.
- Consider that some structured settlement brokers and settlement planners, including members of the National Structured Settlement Trade Association and Society of Settlement Planners are even disseminating propaganda that "factoring improves the structured settlement product" to members of the elder law and special needs community who you may call upon to assist you in your clients' special needs planning.
As part of the recent change to the "standard of care", plaintiff lawyers should consider screening current and prospective structured settlement relationships for their business practices on structured settlement factoring and then draw their own conclusions.