Law Times

Law Times • March 30, 2015 Page 23 www.lawtimesnews.com Judge orders structure over mother's objection Case demonstrates issues involved in settlements dealing with minors By michael mcKiernan For Law Times judge's decision to impose a struc- tured settlement over the objections of a child plaintiff 's litigation guardian shows the justice system's increasing confi- dence in structures, accord- ing to a broker of the prod- ucts. The case of Zhau v. 2100950 Ontario Inc. (Con- gee Queen) involved a child, Brian Zhau, who had sus- tained serious injuries to his wrist and hand following an accident at a restaurant. After six years of litigation, the par- ties agreed to a settlement that included a $125,000 payment to the boy, now aged 13. The boy's mother, a Family Law Act plaintiff in the action, wanted his settlement paid out in a lump sum when he reaches 18. She argued the amount was "not large enough" to justify a structured settlement. Anthony Ngai, Brian's liti- gation guardian and a fam- ily friend with paralegal experi- ence, agreed with the mother, stating in an affidavit that he was "providing instructions against structured settlement" since he viewed it as a poorer financial option. However, when the settle- ment came before Ontario Su- perior Court Justice Nancy Spies for court approval, she rejected their recommendations. "I am very concerned that neither Mr. Ngai nor [Brian's mother] seems to appreciate that it is for this Court to decide what is in Brian's best interests. Al- though I welcome their views, I am not looking for their instruc- tions. My mandate is [to] make an order in the best interests of Brian, which may or may not ac- cord with their views and prefer- ences," Spies wrote in her Feb. 3 judgment in Zhau. "I disagree vigorously with Mr. Ngai's evidence that the amount is 'not large' . . . . In my opinion this is precisely the type of case where a structured settle- ment is in the best interests of the minor," Spies added. In the end, the judge directed the purchase of a structured settlement for $110,000 with the remainder of the money paid into court for Brian's ongoing expenses. Although structures, which divide large court settlements into regular tax-free instal- ments, have a 30-year history in Canada, Kyla Baxter, president of Toronto-based Baxter Struc- tures, says the stereotypical view of structures involves a very large sum of money. "Years ago, the thought was if a structure is involved, the settlement must involve a lot of money, at least $500,000 or higher. That is not always the case. If there is a need and the structure can fulfil that need, then it's all up to the structure company to be creative and design the most appropriate plan with the best outcome no matter the settlement amount," says Baxter. "I have a lot of respect for judges who are proactive and suggest structured settle- ments. It means they have much experience and knowl- edge of the workings of struc- tured settlements and they can see their value." Ralph Fenik, president of McKellar Structured Settle- ments Inc. in Guelph, Ont., says that while brokers don't really make money on a structure worth less than $100,000, they frequently set them up for amounts far below that level, particularly in cases involving minors. "It all turns on the underwriter's rules. Some will set the minimum at $25,000 but they will make ex- ceptions. We've placed some for $3,500 or $5,000," says Fenik. "In the vast majority of cases with minors, I think regardless of the amount, a structure is preferable to a lump sum." McKellar provided the struc- ture in the Zhau case, and Spies was even in touch with the firm to prepare updated payment options after deciding the final settlement amount. The agreed structure will make four annual payments of $15,000 to Brian starting when he turns 18 with the balance ar- riving in a lump sum at the age of 25. "In my view it is clear that it is BRIEF: STRUCTURED SETTLEMENTS CANADA & USA 1.800.265.8381 | EMAIL info@mckellar.com | www.mckellar.com The reason why we are Canada's largest and most comprehensive structured settlement firm has everything to do with our passion for service and performance— without exaggeration, we make life easier for you. The largest Swiss Army knife has 85 tools that can perform 141 tasks. Almost as helpful as McKellar. Untitled-8 1 14-08-26 4:06 PM A See Cases, page 24 'In the vast majority of cases with minors, I think regardless of the amount, a structure is preferable to a lump sum,' says Ralph Fenik.

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