by John Darer CLU ChFC MSSC RSP CLTC
The following statement is often cited for marketing purposes, as reasons to have your own structured settlement broker or settlement planner with regard to structured settlement transactions.
"In Macomber v Travelers Property & Casualty Corp and Lyons v Medical Malpractice Insurance Assoc., plaintiff attorneys have been sued for harm sustained by their clients at the hands of the defense-provided structured settlement broker."
Notwithstanding that it is a good idea to have your own structured settlement broker or settlement planner. the above statement is inaccurate in that in neither of these two cases were the plaintiff attorneys the defendants as the statement represents. MMIA did not represent Lyons!
In reality in the New York matter of Lyons v Medical Malpractice Insurance Association (MMIA), the plaintiff sued the defendants and their representatives for negligent misrepresentation on the cost of a structure, and the resulting influence on the decision to settle. At issue in the case was who owed a duty of privity to who [Lyons also sued his attorneys for legal malpractice on this case, which was settled in 1987]. The Supreme Court of the State of New York initially granted summary judgment in favor of MMIA, on July 13, 2000. However the New York Appellate Division 2nd Dept. reversed this on September 17, 2001.
§5-1702(e) of the New York General Obligations Law, which was established subsequent to the Lyons case, requires notice by the defendant or defendant's legal representative about the plaintiff seeking professional advice relating to the legal, tax and financial implications of the settlement, including any adverse consequences.