Many tort cases are so large and complex that it is difficult to obtain enough capital to ensure prompt payment of a settlement. A claimant may find herself waiting for years after a case has settled to receive even a portion of the money that was awarded. This type of delay is much more than a frustrating inconvenience; the money awarded in tort settlements is often used to pay legal fees, medical fees, cover unemployment, and cover other expenses that were otherwise averted during the legal process. Fortunately, there are options for those claimants who require their settlement funds at a faster rate than the court can pay.
Structured settlements are agreements between claimants and financial or insurance institutions in which the claimant agrees to receive periodic payments on her settlement amount rather than receiving one lump sum payment. Most commonly, this type of settlement agreement is preferred by claimants who litigated as a result of litigation or some other personal harm. In fact, it is so common for personal injury, product liability, or workplace discrimination claimants to utilize structured settlement agreements to receive their settlement awards that structured settlements have been endorsed by the American Association of People with Disabilities and the National Organization of Disability, two of the largest disability rights organizations.
The United States Department of Justice also recognizes the value of structured settlements. In 2006, the Department of Justice added a list of structured settlement brokers to its Civil Division webpage. The brokers listed on this page meet specific minimum qualifications laid out by the Department of Justice and are approved by the DOJ to “administer settlement payments according to their schedules.” The qualifications are not too extreme: brokers must be licensed in the United States, must not have been suspended from practice or have had a license revoked, must not be a felon, etc. One who practices in annuity brokerage, also known as selling structured settlements, may nominate herself to be included on the list.
The DOJ’s support of structured settlement brokers is significant, in that it legitimizes the industry on a grand scale. With such a well-known agency backing structured settlements, potential clients can more easily become elucidated about the benefits and risks involved with the practice, and hopefully, more claimants will be able to seek assistance with structured settlement brokers.
Written by Shayna Keyles