Structured Settlements

Settlement Pre-Conference

Walking into the formal settlement conference unprepared could be the undoing of all your hard work thus far. Take a look at your role in the case up to this point. If you are not positioned as an integral member of the defense team, your part at the conference will be diminished. Beyond anticipating the questions and concerns about the structure itself, you will need a tailor-made plan for the particular atmosphere and agenda of the formal conference. There is only so much preparation you can do on your own.

In order to gain a thorough understanding of all the important aspects of the settlement conference, a defense meeting should be arranged. As soon as you hear that the settlement conference has been scheduled, you should begin to plan for the pre-conference defense meeting. If it is not already arranged, it is your job to suggest to the claims manager that a meeting is advantageous. At this point, the defense attorney may still be focusing on just getting the case settled not realizing the importance of centering the negotiations around the structure. Meeting with the defense prior to the formal conference is imperative. You may need to sell the structure twice, you best get your pitch perfected before the big game.

The following guidelines will help you navigate the pre-conference meeting:

1. Review the file information and fill in any missing areas
2. Find out where the defense stands on the initial offer as well as any demands made
3. Establish expected roles at the conference
4. Confirm the procedure following acceptance of the structure

File Review

It is critical to confirm that the file information collected so far is accurate, and that there is no missing crucial information. Confirm everything from date of birth to medical status. If any changes need to be made at this point, the opening offer could be affected and it is better to find this out sooner rather than later.

The Initial Offer

Up to this point, you may have had little or no contact with the defense attorney. Keeping in mind his or her authority over the file and at the conference, you can present the structure offers in such a way that you leave room for flexibility in payment stream, but not in the general assumption that a structured settlement will be used.

The advantages of flexibility in designing the payment stream should be extended to the plaintiff attorney as well, so don't expect to hammer out the final benefits at this meeting. Do take advantage of the defense attorney's experience with the plaintiff attorney in trying to anticipate what might be well received.

Establishing Roles

The pre-conference meeting is the chance for you to illustrate why your presence at the settlement conference is necessary. But even after you have worked your magic at this meeting, the defense attorney still may not see the importance of your role in the conference. You can't expect too much help from the claims manager at this point, since he will not be controlling the conference. Assuming he is thoroughly convinced that the periodic payments are the central focus of the settlement, you can raise valid points such as your ability, as a third party, to answer the questions and concerns of the plaintiff.

The defense attorney's initial consideration is his own image at the conference. Make your presentation to be included at the conference in the least threatening manner possible. Attorneys understand the value of deferring to an expert in a settlement situation, your consistent "professionalism" up to this point could be the determining factor.

Also, don't forget, the plaintiff may have objections to your being in the conference which may ultimately leave you out in the cold.

The best advice for a settlement conference is to be prepared for anything from waiting in the lobby for hours on end to taking charge of the negotiations with the defense attorney and claims manager as backup.

Technical Structured Settlement Info

Throughout our training scenarios, we emphasize the importance of alerting the defense to what will take place once a structure is accepted. The pre-conference meeting is the last chance to review the past information and put it together in a coherent summary advising the defense of the procedures to follow. This is also an excellent way for you to gain important knowledge that may save you in the conference when a particular plaintiff concern comes up. Here are the important points to cover:

Funding - When will the periodic payments be funded? It is important to know this because payments are usually set to begin within a certain period after funding. Also, if it is beyond what we have used as an assumed funding date, quotes will need to be reworked.
Documents - Who will be in charge of the Settlement Agreement? Regardless of which side prepares it, we will provide sample language covering the structure and assignment.
Assignment - If there will be a transfer of liability, it is best to go over this document early. The defense attorney may want to take a look at a sample assignment agreement.
SSI's Role - Once the structure is accepted, SSI will confirm the periodic payments with all parties and begin to coordinate funding and documents. We will also follow-up on any necessary concerns of the plaintiff and provide rating information on the selected Life Insurance Company. We will begin to collect application information on the plaintiff and discuss additional issues such as beneficiary and automatic deposit options.

There is a great deal of information to cover at the pre-conference meeting. It should be obvious at this point that preparation for the conference is imperative and the defense would be remiss in letting this opportunity pass. If you have difficulty arranging this meeting, or being included in it, perhaps a letter outlining the importance of these issues, and your role, is in order.

The Settlement Conference

The settlement conference will take on a more formal tone than the pre-conference meeting. It may take place in judge's chambers, the plaintiff attorney's office, or a neutral meeting facility. The defense will normally go along with whatever location is selected. The plaintiff attorney may prefer his office which may offer the element of comfort and security.

At the conference, keep in mind the goals of each of the parties. The settlement conference is one short step away from a trial and the tension level is high, even when all parties are outwardly amicable.

Claims Manager/Defense Attorney: Known as the defense team. Work together to protect the interest of the defending insurance company. The claims manager has ultimate authority over the settlement funds.

Plaintiff Attorney: Works on behalf of the injured party to protect their best interest. Obviously, the goal of the plaintiff attorney is a large settlement (for more than a couple of reasons). As structured settlements gain popularity and automatically overcome resistance, the two sides can arrive at the agreement that there will be a structure faster than in the past. However, there are still a lot of details and numbers to work out and the plaintiff attorney stands ready to go to trial if faced with an impasse.

Plaintiff: Not usually active at the settlement conference, although there are exceptions. The plaintiff will usually be present near the conference, or at least available immediately by phone for input.

Mediator: In order to maintain a sense of fairness and neutrality, the settlement conference will be handled by a mediator. Perhaps a judge or a professional mediator will be used. The mediator may be concerned about an addition to the defense team, so be prepared to state your role and support the importance of your presence.

Structured Settlement Consultant: Sometimes referred to as "The Annuitist". Works with all parties involved in the conference to devise a settlement plan acceptable to everyone. Convincing the defense of the benefit of a structure was done at the pre-conference meeting. At the conference, the attention is turned to the plaintiff attorney and the focus of the negotiation should be directed to the structure. This is the time to determine the present and future needs of the claimant.

Designing the settlement

A well-received settlement plan will address up front cash and future periodic payments to the claimant as well as attorney fees. The claimant will rarely settle without up front cash. The settlement offers should begin with the lowest amount of cash possible to increase the total payout of the settlement. The plaintiff attorney should be able to help the claimant understand this concept.

The total settlement will determine the attorney fees. A percentage (from 25% - 50%) of the settlement will come off the top to cover attorney fees and expenses. In cases involving minors, the amount is often at the lower end as it has to be approved by the court. The attorney has the option of structuring their fees if a portion of the settlement is structured.

Most often, the plaintiff attorney has been shown a structured settlement proposal prior to the settlement conference, so the concept is not entirely new. The basic needs of the claimant may have already been determined which can be fine-tuned at the conference and payments arranged to match those needs. Examples of possible future needs:

• Future Surgery/Medical Needs
• Special Needs Automobile/replacement
• College Fund for claimant, or claimant's children
  Therapy

In catastrophic cases, there are more substantial considerations. A Life Care Plan will probably be arranged by the plaintiff attorney and then countered by the defense. Some of the needs addressed through the life care plan might be:

• Up to 24 hour nursing care
• Purchase and replacement of durable medical equipment
• Wheelchair accessible housing and transportation
• Recreational/educational needs

Once a final life care plan is agreed upon, these needs can be addressed and matched with payments. A trust, funded through large periodic lump sums may be in order to accommodate expenses that are difficult to plan for.

Overview of the Settlement Conference

The mediator will begin the session by getting up to speed on the parties involved and the status of the case. The initial offer will be presented as a means for discussion. The plaintiff attorney may break away to review the offer and discuss it in private with his client. It is possible that the two sides will be separated even at this point with the mediator going back and forth between. Waiting for the mediator to return with a response can seem like an eternity. Keep in mind that the waiting time is often deliberate, calculated and part of the mediator's game plan. Be prepared for this and use the time wisely. The mediator may eventually realize that the negotiations are focused on at least a mutual starting place - the structured settlement - and the two sides will be allowed to work together to devise the plan.

In the event that the two sides are together during the majority of the conference, the plaintiff attorney will break after each subsequent offer is presented. At first there may be objections to the payment stream, or even to the use of structures in general. The defense will respond to any objections and work to prepare a more suitable offer. The defense will likely be unable (or unwilling) to meet all of the plaintiff demand's. The goal is to present a suitable solution, and develop a convincing rationale for the outstanding demands.

In the event that the goal cannot be met at this conference, another will be scheduled and the process starts again. A workable solution may arise before the next conference, so keep up on the file activities after the meeting.