by Structured Settlement Watchdog
Disgruntled structured settlement broker turned lawyer Dick Risk and his Big Stick Steve Berman filed a lawsuit against various AIG entities in January 2017, a portion of which focused on broker commissions and attempted to further the theory that the involvement of a defense broker shortchanged the plaintiff. The lawsuit was dismissed in September 2018. The plaintiffs appealed in Ezell v Lexington et al., oral arguments were heard in March, 2019 and a decision awaits.
In prior blogs over the past 2 years I have offered reasons that impeach Disgruntled Dick's theory.
Now in further impeachment of Risk's theory I offer to hang him on his own words. From the second newsletter of 2004, an article authored by Richard B. Risk, Jr. says:
"QSFs are widely being used by plaintiffs’ attorneys to protect their clients from the abuses of the liability insurers and thereby they avoid legal malpractice claims by their clients. Use of the QSF assures that the client gets the full benefit of the settlement’s present value represented by the defense and that no portion of the annuity commission is retained by the defense or used to pay defense costs"
Does the plaintiff get the full benefit of the present value represented by the defense for a structured settlement when a QSF is used?
No, because the QSF has administrative costs that would not be present if the structured settlement was done without the intermediate step of a qualified settlement fund. If the Defendant or Insurer pays $1,000,000 into a QSF, that doesn't mean that the plaintiff gets $1 million.
Does the plaintiff get the full benefit of the present value represented by the defense when only a plaintiff broker or settlement planner is involved, regardless of whether a QSF is used?
No , under the plaintiffs' theory propounded by Risk and Berman in Ezell v Lexington et al., because it is merely a shifting of commissions. It does absolutely nothing financially for the plaintiff. The plaintiff rep is simply making double the commission! Licensed insurance agents or brokers may not rebate commissions under the insurance laws of states across the country. The plaintiff receives the same if there is one licensed insurance agent or two(*or three for that matter)
It should be noted that the same issue of Risk's newsletter "upsold" the now failed attempt to get Treasury to make a Revenue Ruling on Single Claimant Qualified Settlement Funds. While a few companies would accept an assignment from a single claimant qualified settlement fund, in 2004, generally none will do so today.