A structured settlement is used in accident and medical negligence claims as an alternative to the payment of a lump sum.
It may have three parts:-
- An interim payment - normally set to cover costs and expenses met by you before settlement. This would include medical and legal cost
- A series of payments in regular instalments, normally met by an annuity set up to increase with inflation
- A further lump sum to cover contingencies which may not be met by the annuity payment
The most difficult aspect of the structured settlement arrangements in practice relates to the annuity.
The main issues are:-
- The expected lifespan bearing in mind the effect of the injuries suffered
- The frequency of payments
- Matching the annual increase in the annuity tot he likely rise in medical care costs
- Whether the annuity is funded by the purchase of an annuity from an insurer or 'self funded' by the defendant
- Whether there is an insurer willing to provide an annuity for life which increases by the RPI
Please contact us to discuss how we can help you.
