by John Darer CLU ChFC CSSC RSP
Tab H. Keener an attorney with Dallas, TX defense law firm Downs Stanford PC, has penned "What is a QSF and When It Should be Used?" which was posted on the Primerus website November 11, 2009. Primerus is an international network of top-rated, independent, law firms, in over 100 cities worldwide.
Keener does a fairly good job of explaining what a qualified settlement fund ("QSF") is and includes some caveats about them in cases involving single claimants. Most noteworthy from the standpoint of plaintiff lawyers and settlement planners is that Keener suggests to other Primerus network defense lawyers that there is no comfort to be had by defendants and insurers in plaintiffs and their attorneys providing additional indemnification.
Here's the quote
"To alleviate these problems claimants and their attorneys may suggest providing additional indemnification and promise to execute a Compromise Settlement Agreement. However, no revenue ruling or regulation clearly states that a QSF may be used when dealing with a single claimant or single injury involving derivative claimants. A QSF is often suggested by claimants and their attorneys to bypass an approved list of annuity companies or in an effort to cut out brokers suggested by defendants and their insurers.
In conclusion, until additional regulations are promulgated, clearly stating that a QSF may be used with single or derivative claimants, counsel should be wary to agree to use a QSF. During settlement negotiations, counsel should be vigilant to ensure that a QSF is not part of any settlement agreement among the parties until these issues are resolved".
According to the Primerus website, lawyer candidates for membership in Primerus must have the maximum AV rating from Martindale-Hubbell, the peer review rating source that lawyers use to find other lawyers. Further, a law firm must submit to a rigorous evaluation which includes candid assessments from judges, fellow attorneys, current and former clients, bar associations, and malpractice insurance carriers. Firms must also attest to their commitment to the exacting standards of the Six Pillars of Primerus Quality: Integrity, Excellent Work Product, Reasonable Fees, Continuing Legal Education, Civility, and Community Service. They say "it doesn't end there". Primerus firms are audited annually to ensure that they continue to be the "best of the best," year after year.
More information on Qualified Settlement Fund or QSF