by Structured Settlement Watchdog
United States District Judge Janet C. Hall approved a $72.5 million preliminary settlement of the Spencer v Hartford structured settlement class action lawsuit on June 7, 2010. The settlement impacts thousands of annuitants who received structured settlements as part of resolving claims or litigation with Hartford insured Defendants between January 1, 1997 to June 7, 2010.
A June 8, 2010 report in Beyond Structured Settlements by Patrick Hindert ,suggests that this applied to all Hartford structured settlements from January 1, 1997 to June 7, 2010, which is inaccurate. For example the settlement does not apply to those that simply had their settlements with defendants and/or insurers other than Hartford, funded with annuities issued by Hartford Life Insurance Company or Hartford Life and Accident (which at one time also underwrote some structured settlement annuities).
As is often the case with class action settlements, the gross proceeds are being deposited into an escrow account which, in September 2010, following court approval, will become a 468B Qualified Settlement Fund ( a tool commonly used in mass tort cases). Following a "Fairness Hearing" in September the process of distribution will begin.
So what does this really represent financially to the individual claimants? According to Spencer v Hartford "maven" Patrick Hindert (who famously over estimated the value of the case by tenfold):
- "Gross settlement payment of $72.5 million represents 4.5% of total premium dollars Hartford used to purchase structured settlement annuities from January 1, 1997 to June 7, 2010.
- Example: for a class member who structured $100,000 in a personal injury with Hartford, the gross recovery (before attorney fees and expenses) is expected to be $4500".
- By this logic a class member who structured $1,000,000 is expected to receive $45,000.
- The lead plaintiff Oshanya Spencer's original annuity was approximately $52,000. By Hindert's logic she only gets $2,340.
To put things in perspective one has to remember that despite a number like $72.5 million, a settlement is a compromise. The plaintiffs, through some very capable attorneys, made allegations of wrongdoing and sought to prove their case. After years of litigation and finally a mediation, the defendants, for their reasons, decided to settle and the plaintiffs agreed to settle.
To wit, stated reasons for settlement:
- Plaintiffs want to avoid the "uncertainties and vagaries of ...complex litigation";
- In Hartford's best interests "to avoid litigation risk and uncertainty, further expense, inconvenience, and the distraction of protracted litigation and interference with ongoing business operations".
These are the reasons that cases settle each and every day all across the world.
Despite the manner of Hindert's implication that Hartford's response (to the allegations) in the settlement papers was somewhat unusual they are entirely routine:
- "Hartford denies plaintiffs' allegations of unlawful or wrongful conduct, and denies that any conduct challenged by plaintiffs caused any damage whatsoever.
- Settlement shall not be "construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by the Hartford or the truth of the [Plaintiffs'] allegations"