by John Darer ® CLU ChFC MSSC RSP CLTC
What happens after Plaintiffs have won a medical malpractice (or other liability) verdict in courts in the State of New York?
Gerry Oginski, a New York City area medical malpractice attorney, has released a useful video podcast on the above subject As Oginski points out, when a verdict is rendered by a jury, the defendant (or his/her/its insurer) doesn't simply write out a check. Oginski takes the viewer through the post trial motion and appellate process. Although not mentioned directly on Oginski's video, it is important to point out that medical malpractice or liability awards in the State of New York are subject to the statutory requirements for a structured judgment. The structured judgment requirements provide that future damages in excess of a statutory threshold be paid periodically (i.e. over time). If you are fortunate enough to have a sufficiently large sustained verdict, ultimately the defendant (or its insurer) will be required to purchase (and guarantee) an annuity to fund the "excess" future portion of the damages in the judgment that is paid to you. The form of annuity for payment of the "excess" future damages other than lost earnings, is in the form of a temporary life annuity. A temporary life annuity pays over a fixed period of time or your lifetime, whichever is sooner.
In addition to the post trial issues raised by Oginski, a complex series of calculations must be performed in order to finalize a judgment in New York. The statutory requirements, which have been in effect since the mid 1980s are set forth in Article 50A (CPLR 5031-5039) for medical, dental and podiatric malpractice cases and Article 50B (CPLR 5041-5049) for other liability cases. The two articles were substantially similar until 2003 when Article 50A was amended. The calculations and proposed judgment are presented to a judge in a post trial hearing outside of the ears of the jury that rendered the verdict.
The manner in which such calculations are performed can also be a matter of dispute and may create additional appellate issues than those raised in the video. Generally experts in structured judgment calculations under New York CPLR Articles 50A and 50B are retained by the counsel for both sides. Providers of such services include certain economists, structured settlement consultants and settlement planners, although there are only a few structured settlement consultants (including this author) who have the experience working on such cases to have comprehensive knowledge on the subject. It is not simply the matter of calculating the cost of an annuity.
A significant issue for a plaintiff with large recovery is that a structured judgment does not offer the same customization as a structured settlement, and comes with the risk that the non guaranteed portion of the recovery could evaporate in the event the plaintiff dies prior to the end of the defined life contingent period. Careful attention must be paid to assessment of this risk, particularly where there is a spouse, children and/or other dependents. If the plaintiff is insurable the risk can be mitigated through the purchase of a life insurance policy. If the plaintiff is uninsurable based on medical history then the possibility of a settlement in lieu of judgment should be vetted carefully.
A structured judgment also exposes the plaintiff to the credit risk of the defendant, or its insurer.
If you have questions concerning New York Article 50A or 50B, the associated risks discussed here, or other settlement planning and lawsuit recovery issues please contact John Darer at 888-325-8640 or 646-849-1588.