This week Mark Wahlstrom looks at the often careless and frequently dishonest method's certain plaintiff experts have used to try and justify the use of a single claimant case to settle a personal injury case, when often the only true motivation is simply taking control of the structured settlement funding process away from the defendant. The plaintiff experts who push the single claimant settlement fund strategy as an effective planning tool and selling "fools gold" to their attorney clients and now run the risk of profound professional embarrassment by continuing this tactic.
As someone who has worked exclusively as a plaintiff settlement expert for over 25 years now Mark has a personal understanding of why plaintiff brokers and trial lawyers feel so aggrieved about the process of structured settlements and what they view as excessive defense control and interference in the process. However, the answer to that process should not be the careless and casual use of the IRC 468B qualified settlement fund process to add additional expense, process and potential IRS audit scrutiny to the settlement process simply so they don't have to split a commission with a defense broker.
As Mark mentioned in the earlier commentary, there is plenty of blame to go around for the past, but we can't continue to live in the past, we need to move forward. However, the result of this over reach by plaintiff brokers on single claimant cases has led to a situation where there are no life companies that will underwrite a structure on a single claimant case, forcing brokers to look at alternative products or approaches, or to go back to their clients and explain how their time and funds on setting up a QSF were wasted.
The primary purpose of a Qualified Settlement Fund should be to administer a multi-claimant case in cost effective and compliant fashion so as to provide the best planning option to MULTIPLE claimants. Single claimant cases should be legal but used on truly exceptional cases, not as a short cut to close defendants out of the process. There is little to be gained by past practices on BOTH sides of this issue and eventually there needs to be a set of industry standards developed and agreed to by all stakeholders or we run the risk of further shrinking our profession in both numbers of brokers, life markets and premium written.