Law Times

Page 12 March 13, 2017 • Law TiMes www.lawtimesnews.com Lawyers wait until resolution is on the horizon Think about structured settlements sooner, not later BY MICHAEL MCKIERNAN For Law Times T he sooner personal injury lawyers start thinking about struc- tured settlements, the better, according to brokers of the products. Colleen Weber, a principal at Guelph, Ont.-based McKel- lar Structured Settlements, says many lawyers wait until reso- lution is in sight or even after reaching agreement with insur- ers on the value of a payout be- fore turning their mind to the method of payment. "It's best to start thinking about us early in the process, and to get in touch before enter- ing into settlement negotiations," Weber says. "We can help prepare detailed income-loss reports, future-care cost valuations and put values on the best- and worst- case scenarios. "It's also useful for claimants to become familiar with the concept," she adds. Over the past three decades, structures have established them- selves as an increasingly popular alternative to lump sum payouts in Ontario. But the products, which divide high-value court settlements into regular tax-free installments, remain little known outside the legal world, meaning the average accident victim will have no idea what they entail. Kyla Baxter, president of Bax- ter Structures in Toronto, says in her ideal situation, the plain- tiff 's lawyer will introduce her to their client ahead of a mediation session between the lawyers on both sides. It's a meeting that of- ten results in a settlement. "Having met the injured per- son in advance, it allows the struc- ture broker to establish a rapport and trusting relationship with the claimant. This often makes the decision-making process about what to do with their settlement funds much less stressful," Baxter says. "It is not often that we are provided a large sum of money in our lives, and then told that these are the funds to provide for our lifetime. That can be overwhelm- ing. It is our job to educate both the lawyers and their clients so the decision-making process is not an overwhelming one." At Toronto personal injury law firm Bergel Magence LLP, partner Jeremy Magence says some types of cases force him to turn his mind particularly early to structured settlements. For example, settlements in actions involving a seriously injured minor or a plaintiff with brain injuries so severe that they can't make decisions about their case require court approval. "More often than not, the court will insist the funds will be structured in those cases. That way, we know the person is going to be taken care of," Magence says. Still, he says many high-value cases will involve claimants who get to make their own decision about whether or not to struc- ture the settlement. While Ma- gence often introduces the idea early on in the relationship, he says discussion intensifies as the settlement comes into view. "We might have someone from the structure company come in and give us a few sce- narios for how an award could be paid out over time," he says. How hard he pushes for a structure depends on the in- dividual client, Magence says. After almost two decades at the bar, he has seen his fair share of horror stories involving squan- dered fortunes. "Unfortunately, we've had people call up two or three years after a settlement to tell us it's all gone," he says. "You see it with sports stars and lottery winners, too. Even with lots of advisors, they can lose all their money. But with our clients, there is no safety net. They need this money to pro- vide for their financial future." And Magence is willing to spin a few of his cautionary tales if he feels a client is vulnerable. In the case of a 20-year-old client with a history of bad choices in romantic partners and a seven- figure settlement on its way, she took his advice and opted to structure the money. "I'm still in touch with the family, and it worked out well. On at least two occasions, she has been in a relationship with bad guys who tried to get at her money. But because it's in a structure, there was no way to break it and cash out," Magence says. "When you show clients that you're coming from a place of concern for their well-being, they tend to be more open to listen to you. It's important they understand that we care about them not just today but forever." For those determined to take their chances with a lump sum, Magence emphasizes the cre- ativity that is possible with struc- tures. For example, plaintiffs can structure just a portion of the money and collect the rest as a one-time payment or arrange for periodic payouts at landmark moments in their lives to fund things such as university tuition or a down payment on a house. Barry Chobotar, managing partner at Hamilton, Ont.-based Henderson Structured Settle- ments, tells structure skeptics who think they can get a better return in the open market that the tax-free status of the pay- ments makes them tough to beat anywhere else. "The other point that we em- phasize is that the injured victim needs to consider their future and not look at the structured settlement necessarily as a lump sum to be invested but rather a mechanism to provide them with a guaranteed, safe stream of payments to take care of themselves over the rest of their lifetime," he says. LT CANADA & USA 1.800.265.8381 | EMAIL info@mckellar.com | www.mckellar.com You work hard to ensure your clients get the best possible settlements. Help them maintain their income-tested government benefits/credits by encouraging them to structure! OAS BENEFIT HYDRO REBATE SENIOR HOMEOWNERS' PROPERTY TAX GRANT ONTARIO TRILLIUM BENEFITS HST/GST CREDIT WITHOUT A STRUCTURE GOVERNMENT BENEFITS ARE THROWN AWAY CANADA CHILD BENEFIT McKellar puts more money in your client's pocket GIS RDSP BOND/ GRANT Untitled-6 1 2017-01-10 2:51 PM structured settlements Jeremy Magence says some types of cases force him to turn his mind particularly early to structured settlements.

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