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Our experience is that many legal professionals do not fully understand these Structures, and certainly do not feel happy explaining them to claimants. That is why particular experts are often called in in such cases to assist , not just for the implementation, but far earlier to help explain the options. To assist you with this process here are a few helpful pointers.
If you have any questions at all about this or any other Quantum issue please feel free to call Tim Vogel on 01603 715554, or contact us if you want to investigate further the possibility of implementing a Structured Settlement.
When can a structured settlement be used?
I do not mean by this when legally, you already know there is theoretically few limits on when they can be used, but practically? Well traditionally it is in cases of the utmost severity, and damages of in excess of £1 million are often quoted, BUT That is not always the case. In any case where a regular income for a long period (not necessarily life) is desired and damages are substantial (say >£100,000) then they may be worth considering.
What are their key advantages and difficulties?
1) The tax advantage of the income they generate being tax free.
2) The certainty that the income will last for life.
3) The removal of worry about future performance of the
1) The lack of flexibility Once started you can not get access to the capital tied up in them.
2) The potential lower returns that the gross return in the Stock Markets.
3) The lack of understanding of them on both sides of the action.
What features point to consideration of a structure?
1) Uncertain life expectancy. Particularly where the defendant may fund the structure themselves this can be very cost effective on one side and provide much needed certainty on the other.
2) Financial naivety Where a lump sum scares the claimant then a structure can avoid stress.
3) Uncertain stock market returns. When stock markets are performing poorly, there is often a reluctance to commit such large amounts to their volatility. A structure avoids this.
How much do they cost?
How long is a piece of string? It is true that they are not cheap, advisors fees are often £2,000 - £ 3,000 each, but these are usually paid by the defendant. The actual structure is free, and remember that once invested you will not have the fees of an investment manager to pay, or as much paperwork.
What is a structured settlement
With Profit Structures
Discount rates and structures