Law Times

Page 24 March 30, 2015 • Law Times www.lawtimesnews.com cases show how courts deal with structures for minors in Brian's best interests that most of his money NOT be paid to him in one lump sum at age 18. . . . If he is like most adolescents he will have no idea on his own how to manage this money and he cannot be put in a vulnerable position where he might dis- sipate this money for his own personal use or for his family's," wrote Spies. "There is no evidence to sug- gest that Brian would be in any better position than any other 18 year old teenager to decide what to do with such a signifi- cant amount of money. What this structure would do is ensure that Brian receives periodic pay- ments to fund any post-second- ary education that he wishes to pursue. Graduating without any student debt will be a benefit many students never receive." Najma Rashid, an Ottawa personal injury lawyer with Howard Yegendorf & Associates LLP, says the decision serves as a reminder that the court won't simply rubber stamp a minor's settlement based on the ap- proval of their family members or litigation guardians. "The judge takes on a quasi- parental role," says Rashid. She says the suggestion from the boy's mother that he receive his settlement in one lump sum as soon as he possibly could may have raised red flags in the judge's mind. "I think the judge had con- cerns about the ability of the boy and his family to manage such a large sum in his best interest," says Rashid. "This decision locks it in until he's 25." Fenik says structures are particularly useful in cases in- volving minors because they can help circumvent the natu- ral temptation to embark on a spending binge. "To give a young male un- fettered access to $100,000 is a recipe for disaster that would scare the pants off most parents," he says. "Not many 18 year olds are schooled in what to do with money. It usually goes on a ve- hicle." Baxter says she thinks of her own teenaged children when dealing with cases like Zhau. "As mature and responsible as I would love to think they will be at age 18, why take the risk?" she asks. "The plan suggested in this case is the perfect one when dealing with a minor who will most likely go on to a post-sec- ondary institution. You don't need a lot of money and the plan fulfills the need for schooling. If for any reason the individual is not ready for school when the payments are made, they are not penalized. The money is there for when they need it." Zhau isn't the only recent case to have dealt with structured set- tlements, although the issues in St. Jean v. Armstrong were much more straightforward. St. Jean also dealt with a settlement involving a minor, in this case a 2004 collision be- tween a vehicle and a bicycle. On May 28, 2004, six-year-old Adam Ponthier was riding his bike down a hill in Kirkland Lake, Ont., when he ran a stop sign. As he proceeded, he hit the side of a vehicle operated by Richard Armstrong, the defen- dant in the case. The child suffered a severe head injury and eventually end- ed up at the Bloorview McMil- lan Children's Centre in Toronto for rehabilitation. While he has made a good recovery, he still has some leg weakness and bal- ance and co-ordination issues, according to Ontario Superior Court Justice Robert Del Frate's Jan. 14 reasons for his decision in the case. In 2012, the parties brought a settlement of both the tort ac- tion and the accident-benefits claim to the court for approval. The global settlement of $1.7 million included $550,000 in damages for the tort action and $850,000 for the accident ben- efits claim in addition to costs and disbursements. Counsel for the plaintiffs in St. Jean proposed two judg- ments: one would deal with the proposed structured settlements and payments to the adult plain- tiffs while the other would ad- dress costs, disbursements, and unaccounted funds. The settlement included a structure that would provide for immediate payments to cover the child's continued rehabilita- tion. There was also a deferred structure that would begin pay- ments when he turns 25 years old. Besides approving the pro- posed structured settlement, Del Frate also considered whether to uphold the contingency-fee agreement providing the plain- tiffs' law firm with one-third of the damages awarded in the two claims. Noting that liability and dam- ages were a significant issue in the case, Del Frate approved the arrangement on the tort action. "The case proceeded for a long time," he wrote. "Disbursements were high. Skill was required to achieve the result and under the cir- cumstances, a good result was achieved. Considering these fac- tors, the one-third requested by counsel is in my view fair and reasonable." But the judge took a differ- ent view of the fee arrangement when it came to the accident- benefits claim. He called for a reduction of the $280,500 in proposed fees, instead awarding $170,000. "This was not the type of case whereby the insurer took a hard line approach," wrote Del Frate. "The injuries were serious. Benefits were necessary. The in- surer recognized this and they were provided and continued to be provided as is evidenced by the lumping out of the accident- benefits." Del Frate also rejected a re- quest by the law firm for a sealing order given its concern about so- licitor-client privilege in relation to the contingency-fee agree- ment. "In my view, infringement of the solicitor/client privilege regarding the [contingency-fee agreement] is minimal, if at all," he wrote. "All other information about the accident and treatment would be public information in view of the pleadings that have been filed. There is nothing ex- traordinary that would require such an order." LT BRIEF: STRUCTURED SETTLEMENTS What do your clients need? The means to move on. Guaranteed. ™ Baxter Structures customizes personal injury settlements into tax-free annuities that can help your clients be secure for life. » Pre- and post- settlement consultation and support » Caring professionalism for over 30 years » No fee to you or your clients Need more information? Contact us at 1 800 387 1686 or baxterstructures.com Kyla A. Baxter, CSSC PRESIDENT, BAXTER STRUCTURES Baxter_LT_Oct7_13.indd 1 13-10-01 4:03 PM Continued from page 23

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