by John Darer® CLU ChFC MSSC RSP CLTC
New York State General Obligations Law 5-1702 places a burden on defense lawyers, defendants, in house lawyers for defendants and insurance adjusters based out of New York, having New York adjudicated cases to make certain written disclosures when a structured settlement is negotiated.
New York General Obligations Law Section 5-1702-Structured Settlement Protection Act
In negotiating a structured settlement of claims brought by or on behalf of a claimant who is domiciled in this state, the defendant or defendant’s legal representative shall disclose in writing to the claimant or the claimant’s legal representative all of the following information that is not otherwise specified in the structured settlement agreement...
5-1702 (e) a statement that the claimant is advised to obtain independent professional advice relating to the legal, tax and financial implications of the settlement, including any adverse consequences and
that the defendant or defendant’s legal representative may not refer any advisor, attorney or firm
for such purpose (emphasis added)
On cases of a highly sensitive nature it is important for Defendants and Defense counsel and mediators not to lose sight of New York General Obligations Law 5-1702 and to avoid the conditioning of money on exclusively using the defense retained structured settlement consultant. While I am not aware of specific cases where a defense lawyer or defendant has been punished for not complying with this New York law, I'm sure that nobody wants to be a volunteer.
Since it is both a recognized and prudent practice today for both parties to have settlement consultants, why put yourself or your client in harm's way? One suggestion is to have the plaintiff settlement consultant agree to be bound under a confidentiality agreement.