by John Darer® CLU ChFC MSSC RSP CLTC
A Long Island NY plaintiff lawyer purportedly, was recently told that if he insisted on his own structured settlement adviser with respect to any structured settlement, the case would go on back burner and it would delay his getting paid.
First of all this notion is absolutely preposterous. The New York General Obligations Law 1705(e) creates an affirmative obligation on the part of the defendant or the defendant's attorney to make:
"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.
Second, New York Senate Bill 8072A sponsored by Eric Schneiderman includes the following ad gives an idea of what the legislature is thinking:
"Structured settlements are current public policy both in New York State and Federally, providing for significant tax exemptions to children and disabled citizens of our state as an incentive to enter into periodic payment obligations. Although we are protecting our citizens that are attempting to sell their current existing structured settlements, we have done nothing to protect their rights in establishing a structured settlement in the first instance. The marketplace of structured annuities is complex and diverse, this bill established transparency for plaintiffs entering into structured settlements as partl of the resolution of their lawsuits, and makes the brokers/agents accountable to them as part of the sale of insurance. Due to the natural opposition encountered between parties in litigation, the plaintiff, the real consumer of insurance, and beneficiary of the structured settlement needs representation from an expert in the field of structured settlements. This bill gives the plaintiff a right to representation, fairly compensates that expert, and eliminates the self dealing occasionally encountered when insurance companies settle cases with plaintiffs state wide. This policy will foster a greater confidence in structured settlements, and will further encourage their use by all parties to litigation. At a time when every financial transaction and insurance product is in question, we should not expect the citizens of our state to entrust their financial future to the agent of their opponent in litigation. To continue do so, controverts the public policy and undermines the entire existence of structured settlements".
This author believes that both parties deserve representation. Yet whatever side of the fence you are on this issue, or on any particular case, the behavior described above, is just plain silly. Consider the following questions:
- Could the attempt to circumvent the law (actually in contravention to the disclosure that they are legally obligated to make) by the defendant or defendant's representative in appealing to the plaintiff lawyer's need to be paid, be considered an actionable unfair trade or claim practice?
- If this occurred at a mediation and was witnessed by a mediator or a judge, or any other party present, if things later go wrong for the plaintiff, could that put the plaintiff lawyer in jeopardy for not seeking independent advice for his client?
- Are there any conditions by which a defendant is exempt from complying with 5-1702?
This matter concerning the Long Island attorney is under investigation.
New York Structured Settlements: Defense Counsel, Don't Blow Your Sec 5-1702 Disclosure Obligation!
Plaintiff Structured Settlements New Rights In New York Senate Bill S8072A?
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