Law Times

Law Times • November 29, 2010 BRIEF: STRUCTURED SETTLEMENTS PAGE 13 Be selective in choosing brokers, companies advise I BY ROBERT TODD Law Times t can be difficult for lawyers and their clients to select the right structured settle- ment broker, but by taking the right considerations into ac- count, they can end up with the right one for their unique situation. "Overall, there just needs to be a little more careful consider- ation of the brokers and the or- ganizations," says Ralph Fenik, president of McKellar Struc- tured Settlements Inc. "It's the same as dealing with any service provider, whether it's a car re- pair shop or house contractor. A little bit of investigation is perhaps warranted and benefi- cial in the long run." That means it may be best for insurers and lawyers to put aside the size of a payout offered by a brokerage in favour of factors such as its complement of pro- fessionals and ability to fully ser- vice clients throughout the life of their structured settlement. Henderson Structured Set- tlements LP managing partner/ consultant Bob Nigol empha- sizes the need for the company and all of its constituent consul- tants to be properly life-licensed and adequately contracted with all of the life insurance com- panies that meet the solvency requirements of the casualty insurers that purchase the struc- tures. That will "provide the re- cipient of the benefits the best possible outcome in terms of income producible," he says. "If you only have one life company, obviously that wouldn't be suf- ficient because you would be denigrating the best interests of the recipient." A brokerage can also best serve recipients with a thor- ough understanding of insur- ance law and the rules of civil procedure in the relevant juris- dictions, says Nigol. But there's much more that a solid struc- tured settlement company can offer, he adds. "We stand in place of actu- aries, accountants, and econo- mists quite regularly in the pro- duction of reports that evaluate damages," says Nigol. "That's a value-add." Douglas Mitchell, presi- dent of Structured Settlements Group Inc., says plaintiffs' law- yers often find it difficult to se- lect a broker on their own. "You have to choose an ex- pert that you want specifically on your side, not accept the ex- pert that's being hoisted off on you by the defence," he says. Unfortunately, says Mitch- ell, plaintiffs are frequently of- fered a pair of brokers to work with and face a prolonged battle if they hope to use one that's not on the defence's short list. He says there are no laws in Canada to manage the is- sue but suggests some lawyers have been able to gain con- cessions by requesting a court order. Still, the issue can come Untitled-5 1 down to the fact that a lawyer may have to be willing to risk a failed settlement in order to gain a concession on which broker to work with. "Of course, the plaintiff's lawyer just can't," Mitchell says. Kyla Baxter of Baxter Struc- tures says it's useful to find a broker willing to be creative boutique-style firm. Plaintiffs should also try to find a broker who works well with others, she says. "We're here not to impede the process. We want to make sure we settle these claims. We're not there to obstruct the process." At the end of the day, it may come down to a "gut feeling" end up going off the rails if a company is unable to assist a client throughout the life of the settlement. "There is no interest by any other broker to get involved in concluding and processing outstanding work that has already been funded for which no compensation is available," says Fenik. So if the wheels come off the wagon, so to speak, anybody picking up the work to complete the processing may well find themselves in a lawsuit. So invariably, they would want to exclude themselves from . . . any work that has been already done and funded. with the creation of a plan and who thinks outside of the box when necessary. At the same time, service responsiveness and accessibility are crucial. "Everybody has a different approach. Some are bigger, some claim that they are bet- ter," she says, noting some in- jured parties may find it more comfortable to work with a as to which broker a plaintiff or counsel is most comfortable with, she adds. "It feels right, it fits. Lawyers might ask them- selves, 'If I were injured, who would I want to work with?'" Meanwhile, Fenik urges lawyers and plaintiffs to put careful thought into the stabil- ity of the structures firm they employ. He says files could On top of that, there are is- sues of exposure to liabilities even if a benevolent brokerage is willing to take the work on a pro bono basis. It must consider what it may be exposing itself to in terms of the representations and actions of the former broker. "So if the wheels come off the wagon, so to speak, anybody picking up the work to complete the processing may well find themselves in a lawsuit," says Fe- nik. "So invariably, they would want to exclude themselves from . . . any work that has been al- ready done and funded." A lack of oversight can be devastating if a broker- age ceases operation. As well, the work required to keep the investment flowing doesn't stop. Even minute details like changes of address, changes of bank accounts, co-ordination of payments, help with estate details upon death, and yearly valuations require ongoing at- tention from the brokerage. Factors such as these dem- onstrate the pitfalls of insur- ance companies' and lawyers' typical approach to selecting a broker, which often involves little more than a search for the one that will give them the most money, says Fenik, who suggests price don't necessarily work when it comes to structures. comparisons LT www.lawtimesnews.com 11/23/10 11:48:32 AM

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