Tip #5 - Pay particular attention to the structure details in multi-party settlements

April 22, 2014

We continue with our top 10 tips for structured settlements.  By way of recap, here's what we've covered so far:

#1 - Get the right to structure!
#2 - Clarify structure ownership
#3 - Don't forget the Assignment Fee(s)
#4 - Dot your "i"s and cross your "t"s on reversions

Check out our blog history if you need a recap on any of these first four tips.

Tip #5 suggests that all of the above four need to be clarified with each contributor to a multi-party settlement.

In cases where there are multiple parties contributing to a global settlement, all sorts of "structure combinations" are possible. Therefore, it is crucial to have the structure details sorted out with each contributor, at the time of settlement. The position of each contributing party may vary insofar as the structure is concerned. For example, one insurer might consent to a structure, while another may not. One might require assignment, while another may own directly.

Many times, we've been advised that "this matter settled for $x at mediation, with the right to structure"...only to find, once we follow up with the various insurers contributing, that each insurer thought the other insurer(s) would deal with the structure. Minutes of Settlement should explicitly spell out each party's rights and/or obligations regarding the structure. 

Of course, the more complicated the settlement, the more help a structure broker can be in sorting out the necessary details, so don't hesitate to call to make sure you've covered all the bases.

Laura Mullin, Principal (HBA, CIP, CSSC)