by Structured Settlement Watchdog
Plaintiffs Lawyer in AIG Structured Settlement Class Action says on his own website "The annuity cost is really the consideration being paid by the defendant to the third party assignee (annuity company) for assuming the future payment obligation".
It is now common for there to be "structured settlement brokers, settlement planners, settlement consultants, settlement experts" on either side of a settling personal injury case. Not dissimilar to a real estate business model. Everyone, or their firm (if salaried employees) works on contingency. It's a common feeling among participants in the settlement industry that participants have done a great job learning to work with each other for the common good, particularly the welfare of injured people, just like real estate business model with buyers and sellers.
While hoisting himself on another time delayed petard that appears to undermine his legal arguments, it appears that Richard B Risk Jr an attorney now suing AIG, set a sneaky trap (and advised others to set the same trap) for unwary defense lawyers and their clients whose seeds were sown when he recommended that lawyers insist on plaintiff representative to the exclusion of an adviser for the defense and a whole series of terms despite the following admissions:
Slide 47 " SA (Settlement Agreement) Should never have language stating that Plaintiff will be purchasing the annuity. •such language violates constructive receipt •defendant or liability insurer purchases annuity directly from annuity company" Source: Risk law Firm website
Slide 50 "SA (Settlement Agreement) should not state that the cost of the annuity is the consideration being paid to Plaintiff. •Consideration to Plaintiff is the cash lump sum, if any, and the obligation to make future periodic payments on the dates specified. •The annuity cost is really the consideration being paid by the defendant to the third party assignee (annuity company) for assuming the future payment obligation" Source: Risk Law Firm Website
Having then made these two truthful admissions in 2005 that contradict allegations in the 2017 AIG Complaint, it's helpful to isolate part of Dick Risk's Lorman presentation featuring a slide that suggests a sneaky tactic that could ensnare a claims adjuster and defense attorney and increase their defense costs.
The last in a laundry list of items that the Risk suggests the plaintiff lawyer asks for and heavily emphasizes is:
“Each party bears own costs.” The relevance of this appears to be so that the plaintiff can than make the argument that Risk is asserting in the AIG complaint. That the defense should pay its broker in additional cash, not in what is customary practice of the real estate model. The plaintiff saves nothing because rebates are illegal in most states. The only person that benefits is the plaintiff broker not the plaintiff because it just increases the broker commission.
In New York, a licensed insurance agent or broker, including a structured settlement broker, cannot rebate commissions or enlist the help of anyone to do, such as tying contributions to a trial lawyer association or use the "extra commission" to advertise " no cost qualified settlement funds" See Opinion of Counsel New York State Insurance Department September 24, 2007
Where reductions were allowed, such as with 9-11 victims families and more recently with the families of Marines killed in Lebanon in the 1980s, it required a legislative exception. NY Structured Settlements | Rebating of Structured Settlement Commissions Expanded Under NY Law
Risk thrives on fear and distrust. It's a pity that Dick Risk could not use his efforts to fight for people who are really being harmed by bad practices in the structured settlement secondary market.
In connecting the dots and breadcrumbs that Risk has left over the years it would be prudent for defense counsel and their clients to address such tactics by using common sense, educating participants, simply putting consultants for each side together as is already common place. To promote one's work ,as one of my industry colleagues has said," by continually advocating that structured settlements are some sort of conspiratorial tool, and that nobody can be trusted", is a sad reflection of little relevance to our industry today. Structured settlements are highly regulated, transparent, extremely safe, quite uniform, and generally completed under the watchful eyes of lawyers, brokers, a judge, etc.
And that further underscores one of my observations that "prime time" lawyers representing the representative plaintiffs in the underlying settlement that has now instigated the putative class action, use structured settlement brokers and settlement planners and knows how they are paid. Why didn't they inform their own clients as part of that representation.