“Our son sustained a horrible injury during birth that will require life-long medical care. There will be a large malpractice settlement. Our lawyer strongly recommends a structured settlement annuity, but my financial adviser says he can significantly grow the funds with proper, managed investments. What should I do?”

Interest in structured settlement annuities has been growing in 2024. Insurance companies issued about $2.6 billion of these specialized annuities from July to September, according to John Darer, a Connecticut expert on structured settlements. Darer sees demand for structured annuities topping $9 billion this year.

The reason for this growing demand is easy to see. Accident victims need a secure place for their settlement funds. Financial or political uncertainties could do real damage to stock portfolios.

Listen to your attorney!

When a child is involved, financial planning is completely different from ordinary investing. There’s often no room for error. While stock investments have the potential for growth, they can and do fall, bonds can be called, and either can result in serious economic risk for your child.

Your child’s health is at stake, and you need financial security. Even a well-diversified mix of stocks and bonds can’t offer the guaranteed tax-free income you get with a structured settlement annuity.

Retain experienced counsel

“It’s good that your reader is working with an experienced personal injury attorney who can recommend a structured settlement professional to help design a payment stream that matches his child’s future needs,” Darer said.

He offered some other important information to know about this process:

Your biggest benefit: peace of mind. Ponzi schemes hit a seven-year high in 2023, according to the website Ponzitracker.com. If you get a large cash settlement, you can expect friends, neighbors, distant relatives and swindlers everywhere to hound you for money. They will pressure you for help repairing their car, going to Las Vegas or investing in crazy get-rich-quick schemes.

If you are someone who can’t say no, then your protection and safety lie in a structured settlement annuity held by an insurance company that pays according to the plan you designed with your attorney and settlement consultant. That way, no one can pressure you to put your future at risk. You get what is paid each month — nothing less and nothing more.

Your payments are guaranteed by a state insurance fund. Insurance companies are regulated at the state level, and each state has an insurance guaranty fund. These funds provide minimum guarantees (up to $250,000 in most states) in the unlikely case your structured settlement annuity holder becomes insolvent. The concept is similar to how the FDIC guarantees the first $250,000 of your bank account. Often, large settlements are placed with several insurance companies, assuring adequate protection.

Payments are exempt from income tax. Under the federal tax code, 100% of your structured settlement payments are exempt from federal, state and local income taxes. They are also exempt from taxes on interest, dividends and capital gains. This is an especially big benefit if you live in high-tax states such as New York, California, Illinois, New Jersey and Massachusetts.

No ongoing fees. Advised to have a stockbroker manage your settlement for you? Get ready to pay and pay and pay. Advisers charge in several ways including flat fees, commissions and an annual percentage of your assets. You may not deduct these fees on your taxes. By contrast, there are no ongoing fees with a structured settlement. The professional you work with on your settlement receives a commission from the insurance company. You pay nothing.

Three additional suggestions

Finally, if you consider a structured settlement, here are three suggestions I can make as a lawyer who has represented accident victims for over 30 years:

Make sure your structured settlement consultant has a certification. The University of Texas, among other institutions, runs a certification program requiring graduates to demonstrate competency in insurance and financial strategies. “The program does a good job in promoting industry competence,” says Peter Arnold, a certified structured settlement consultant for 20 years. “It’s also been effective in freezing out people outside the structured settlement industry, especially financial planners and the settlement purchasing industry.”

Get annuity quotes in writing. Many solid insurance companies issue structured settlement annuities. Make sure your structured settlement consultant gets quotations on the annuity cost directly from the insurer and in writing. Do not rely on a defense attorney or their structured settlement consultant.

Insist on written disclosure of “backdoor” benefits to your broker. A shady underside of the structured settlement industry involves swanky trips and other benefits insurance companies put on for brokers to gin up business.

Several years ago, I wrote about Pacific Life Structured Settlements offering agents a trip to Dubai and the Maldives. In my view, these trips violate financial trust and the industry’s written code of ethics. Make sure the consultant you work with discloses in writing any benefits, including junkets, they have received from insurers during the past three years and may reasonably be expected to receive in the next 12 months.

In a future story, we’ll look at the perils of selling your structured settlement.

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post Structured Settlement Annuity vs Lump-Sum Payout: Which Is Better? appeared first on Dennis Beaver.

Conflict is part of life. Just ask any divorce attorney, bankruptcy lawyer or lawyer who represents employees in wrongful termination lawsuits, “What is the common denominator that brings clients to your office?” They will tell you that it is more than simply an unresolved conflict, but their clients also doing things that stand in the way of a resolution.

Harvard anthropologist and negotiation expert William Ury, author of the bestselling Getting to Yes, gives us a road map of how to approach conflict resolution in his new book, Possible: How We Survive (and Thrive) in an Age of Conflict (coming out on February 20).

I discussed these issues with Ury and Dr. Luis Vega, social psychologist and interim dean of the School of Social Sciences & Education at California State University, Bakersfield. Here’s how not to approach a conflict at home, at work or anywhere people disagree.

1. Fall into the ‘three-A trap’ — attack, avoid or appease.

Ury: The best way to not resolve a conflict is to fall straight into the “three-A trap.” Either go on the attack, thinking, “I’m going to win this,” or do the opposite, which is to avoid. Or appease — just give in. But that doesn’t resolve it either, because we’re not happy, and it probably isn’t going to stay resolved for very long.

2. See the world as having only winners and losers.

Vega: An “I win, you lose” attitude robs others of their humanity and feeds the virus of bigotry and vitriol. Self-focus deprives us of the need we all have for connection and community. Conflict becomes circular — they attack us, we attack them, and we all lose. Marriage counselors see this a great deal where one partner insists on always being right and can’t find their way to compromise. The next step is obvious.

3. React out of fear and anger.

Ury: Don’t give in to your initial emotional reactions of fear and anger and then dig in, refusing to budge and thinking, “It’s them vs us.” You will destroy all trust and almost all possibility of agreement if you:

Focus on your problem alone, not their needs.
Just talk at people, or don’t talk with them at all.
Cut the phone line with your neighbor as a way to deal with your differences.
Reduce it all to a zero-sum proposition where one side wins, and the other side loses.
Just keep pushing them to do what you want and treating them with disrespect.
Make it harder for them in every possible way.
Also, discouraging help from anybody — “stay out of it; it’s none of your business” — won’t resolve anything.

And, if you’re a third party watching this going on, you can ensure nothing works out by doing nothing. Or worse, taking sides and escalating the situation. Or getting discouraged and giving up very quickly.

4. Overly rely on intuition and experience — fail to listen or pause.

Vega: You may know yourself, the other party, even relevant stakeholders, but vigilance of your own emotions is critical. And it is tricky because of tribal impulses imbued and influenced by primal emotions processed in the lower brain. This often funnels myriad factors into negative feelings that add fuel to conflict — anger, fear, distrust, contempt and jealousy. This is why, before reaching a conclusion or speaking out, we need to pause and listen, thereby calming our reactive emotions.

5. Fail to ask, “How can I help?”

Ury: Asking an open-ended question like, “Can you help me understand what happened here? How can I help?” is an essential tool. Suddenly, in that moment, you are putting yourself on the same side as them, searching for a way to resolve the issue instead of coming in as an adversary. This simple question often changes everything.

Vega: Asking, “How can I help?” gets a reflexive, or programmed, response that creates familiarity with a task — or muscle memory. It hardly matters what the issues are: When someone says, “I need your help,” the reflexive answer is, “Sure, how can I help?” This suspends biases — for a moment — creating a focus on common interests and an opening for dialogue. It is a truly powerful tool.

6. React to sarcasm with sarcasm.

Ury: Either in a meeting or in written form, if you meet sarcasm with sarcasm, attack with counterattack, distrust with distrust, you end up getting into a fight that no one comes out winning.

When putting things in writing, ask yourself, “Who else will see my sarcastic reply?” and “Can this harm my credibility?”

So, just ignore the insults and deal with the issues — you will come out of this looking far better.

The takeaway

Possible makes readers a fly on the wall of Ury’s incredibly accomplished life. Conflict resolution, as readers see, so often comes down to one person who radiates that “we can resolve this together” attitude. It is a terrific read, and he wants the reader to become that person.

The post Six Things Not to Do if You Want to Resolve a Conflict appeared first on Dennis Beaver.

It’s no secret that the lifespan of major household appliances has shrunk dramatically. At one time, you bought a washer and dryer combo and it would last well over 20 years. Today, you would be lucky to see those essential home appliances remain trouble-free for two.

In mid-2017, “Steve” and his wife, “Donna,” who reside in Southern California went shopping for a new washer-dryer, “Wanting high quality and a long warranty as we heard horror stories from people whose machines required expensive repairs days after the typical one-year warranty expired,” he said.

Asked Credible Local Appliance Dealer for Recommendations

“We were customers for over 40 years of a family-owned appliance dealer who recommended an American made, commercial-grade, top-loader washing machine that, in his opinion, was the best on the market. It came with a promotional warranty that ran for several years. We took delivery on July 3, 2017.

Performed Great for over Three Years and then Flooded

“For three and a half years, it worked beautifully, until one day, we returned home from shopping to find our laundry room covered by a substantial amount of water caused by overfilling that was confirmed by service technician ‘Drew’ sent out by the manufacturer.”

Thus began “One of the most frustrating experiences we have ever had in obtaining effective warranty service as it was an intermittent problem. The washer would fill correctly on multiple occasions, and then, randomly over-fill, spilling water all over our laundry room floor,” he explained.

An Exercise in Part Changing

Over the course of about a year and half, Drew returned to the couple’s home trying to repair the washing machine, including:

(1) Changing a water pressure sensor.

(2) Replacing the washing machine motor.

(3) Installing new top tub seal rings.

(4) Changing the auto-fill value twice.

(5) Installing a new idler pulley and belt kit.

At least nine service visits were made in an effort to repair the couple’s washing machine, without success. But this was not some phantom problem, as my reader discovered “several online, identical complaints about the same washing machine model from customers all over the country.”

What Should Have Happened?

I phoned appliance dealers across the country who carry the same make of washing machine asking, “What should the dealer and manufacturer do in a similar situation when it is clear they can’t repair their own product?”

Steve Sheinkopf, 20 years as CEO of family-owned Yale Appliance in Boston, MA had no sympathy for the dealer: “You took their money. You made a profit on the transaction. Now, take care of your customer. Whether you have a service department or not, somebody has to help the customer.

“When it was clear early on that the technician could not repair the washer, the dealer and manufacturer should have replaced the machine. The couple were sold a defective washing machine and this had to be remedied,” he underscored.

In every instance but one, appliance dealers across the United States and Canada told me they would take ownership of the problem, and replace the customer’s washer with a new one, given the long warranty.

What Did the Manufacturer Say

I emailed the manufacturer’s general counsel and asked that someone get involved and remedy Steve’s problem, which had not been successfully dealt with while the washing machine was under warranty.

No response – never got a commitment from them to do the right thing, but Steve received an email from “R” in customer service which stated in so many words, “Your warranty has expired. Tough!”

A Manufacture ignores Legal Obligations at its Peril

While there are variations in state consumer protection laws, the manufacturer of an appliance under warranty can’t just say, “Oh, too bad, your warranty has expired,” as, in most cases, a warranty is automatically extended until the item is repaired or:

(1) A refund is offered, or;

(2) The unit is replaced.

The consequences of non-compliance can be costly, under the Magnusson-Moss federal consumer protection act including suit by a local district attorney or attorney general, and significant financial penalties awarded, not to mention class action lawsuits.

Discussing Steve’s Problem

I emailed “R” and the company’s General Counsel, saying, “It is only fair that I get your side of this issue for my article, so let’s set up a time for an interview.”

No reply, but Steve received a confidential settlement agreement in which the manufacturer would refund his purchase price in addition to tax, and delivery charges.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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Friends of this column, Brian Kabateck of Kabateck LLP, and his partner Shant Karnikian have earned a nationwide reputation as among the most successful plaintiff’s lawyers handling cases on behalf of consumers against insurance companies, large corporations, and wrongdoers.

Brian Kabateck has served as President of the Los Angeles County Bar Association and the Consumer Attorneys of California. Concerned that the actions of a select few nefarious lawyers have risked the reputation of an entire profession, Brian and Shant felt the need to share some guidelines for the average consumer to keep in mind when hiring an attorney.

1. Understand timing and expect reporting from your lawyer. Generally, cases have important dates or events like status conferences, hearings, and trial setting conferences during which important decisions may be made. Your lawyer should be advising you of all important dates and rulings.

2. Always be aware of the agreement you entered into. If this is a contingency fee agreement there should be specific percentages laid out in the contract also known as the “retainer agreement”. Understand those percentages. This is particularly important when you are settling the case. Often clients misunderstand the percentages because some attorney agreements might have a sliding scale starting at a lower percentage if the case settles early and going to a much higher percentage if the case goes to trial or gets close to trial.

3. The lawyer’s fee is earned when the case settles and when the settlement funds. Unless you dispute the amount of fees, the lawyer is entitled to take his or her fees upon payment of the settlement. This fee is dictated by the retainer agreement, and it is compensation for the lawyer’s time and effort.

4. In addition to the lawyer’s fee, expect that you will be charged costs and expenses. The case is not free. Not only does the lawyer earn a fee but often the lawyer is advancing costs like filing fees, the cost of ordering court reporters, or copies of transcripts. Those costs may be deducted before or more likely after the attorney fee is charged.

5. Look closely at the costs that you are being charged. Ask for a breakdown. Watch out for certain “hidden costs” which may be impermissible such as an administrative cost to set up a file for the lawyer or a cost to review a file. These are more traditional legal fees which are being disguised as costs. On the other hand, the agreement you have signed may authorize the lawyer to charge a cost for setting up a file.

6. When reviewing costs, determine if it is an in-house fee that the lawyer is charging or if it is an outside vendor. Often lawyers may charge you costs for an in-house fee which is perfectly permissible if it was outlined in the retainer agreement.

7. At the end of the case, often the net recovery for the client can be put into a “structure” or an annuity which will provide a substantial tax benefit to the client, but be very careful if the lawyer claims they are investing money for you or promises to invest your money. This is most often impermissible and is a red flag.

8. Another red flag would be any long delay after settlement. After you enter into a settlement you can usually expect anywhere from two to four weeks before the settlement will fund (sometimes longer if it takes longer to execute a settlement agreement) but any delay beyond that is worth an explanation. Also, within a short period of time after a settlement funds you should receive your net proceeds. Delays are a warning flag.

9. Another warning flag is asking for money during the case when it is not called for. Sometimes lawyers will ask their clients to pay for costs or expenses that they have already contractually agreed to advance.

10. If you win the case and the other side appeals or if you lose and you decide to appeal, your retainer agreement or contract with your lawyer may not cover an appeal. Be sure you understand that in advance and be sure the lawyer is not charging you for something you have not agreed to. It is completely permissible for the lawyer to ask the client to sign a new agreement for an appeal, but they cannot charge you more money unless you have agreed to it.

11. Make sure the lawyer you hired is the lawyer who is actually going to try your case. It is not uncommon for lawyers to handle lawsuits and then refer it out to somebody else to try, but you want to know that up front. Are you hiring a lawyer who is going to try your case? Or are you hiring someone to simply present the claim and then, if it does not settle, hand it off to somebody else? Most states require the client to agree in writing if the lawyer is going to share his or her fee.

12. If you fire your lawyer, they may put a lien on your case but, in most situations, they cannot demand payment upon firing unless the retainer agreement calls out for it. Conversely, if the lawyer withdraws from the case or decides to stop representing you in the case, many states do not allow the lawyer to recover fees.

13. Remember that the case is going to take a long time to work its way through the courts, particularly in the post-COVID world. Courthouses across the country have become log jammed with cases and trials. A case that could go to trial in 18 to 24 months before the pandemic may now take three to four years or longer because of the backlog. Delays are expected, but make sure your lawyer keeps you informed about the reasons for such delays.

14. You may have a great case with clear liability and substantial injuries or damages, but you need to find out early from your lawyer if the defendant has the ability to pay or if there is adequate or inadequate insurance. Make sure your lawyer communicates with you.

15. Communication is the great panacea for all difficulties in an attorney-client relationship. No client has ever complained because they have gotten too much information. Conversely, be wary of a lawyer who is not keeping you posted on what is happening in your case or ignoring your requests for updates.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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It was a beautiful day at Malibu, and Sara was having the time of her life, surfing.

Only she has no memory of being there after the auto accident, having sustained a TBI – a traumatic brain injury which put her into a coma.

Given the extent of her injuries, Sara made an amazing recovery. The structured settlement annuity her lawyer negotiated guaranteed a monthly income of $10,000 plus large periodic lump sum payments, all tax free, for life.

But the TBI played havoc with her reasoning and logical thinking. A conservator was appointed who saw to it that her money was spent correctly, not squandered or lent to family and friends.

But, just like many TBI victims, Sara wanted control of the money and retained an attorney to end the conservatorship. He cared more about his fee than what was best for Sara. It was a horrible mistake.

“I got into business deals, lent money, and thought that I was doing the right thing,” she told me in that unmistakable TBI voice. “This structured settlement has ruined my life, and I was contacted by a company who will cash it out for me. That’s what I want to do, I want it out of my life!”

Don’t Do It!

I calmly reasoned with her. “Please speak to my friend, Greg Honnegar before doing a thing. He is a licensed, professional fiduciary in Templeton, California and works with people just like you, who have lost the ability of making good financial judgments. Will you wait, please?”

Sara agreed and spoke with Greg who put her in touch with a counseling organization in her town. She now has a licensed, professional trustee who will help manage her money.

So, what can family and friends do when faced with a TBI victim headed for financial trouble? What are the signs? What explains their behavior? I put these questions to Greg and his associate, Bakersfield-based Jamie Urner.

How a TBI Impacts Them – What Family/Friends Need to Discover

Jamie: They have a hard time seeing the big picture and making the best decisions. They are often impulsive and will not listen to reason. They use their TBI as a crutch. Irrational and compulsive behavior is common. They do not have a filter of logic.

Greg: When the TBI victim suddenly wants to sell their structured settlement annuity, you need to discover why they want to cash it out. It can be drugs, a new ‘friend’ or romantic interest pressuring them. While always counseled not to, so often TBI victims tell so-called friends about the money they receive every month.

On one level they might realize the need for help in dealing with predators who show-up after learning about their ‘friend’s’ income. But their lack of insight and inability to reason logically makes them even more vulnerable to being ripped off.

Warning Signs – What to Do

I asked Greg and Jamie to set out the warning signs that a friend or family TBI victim is headed for trouble. They listed:

(1) Overspending on wants and not meeting their needs.

(2) Spending compulsively. Buying 14 pairs of sunglasses and yet has no money to afford groceries.

(3) Hygiene and appearance issues. They are suddenly not taking care of themselves.

Jamie: When you see any of these things happening, get them to a medical professional, such as a neurologist, or someone who works with brain injuries. You must address the underlying physical condition and opiates, or other pain medication. What is their medical, or psychological condition? Are they delusional?

Greg: If it is clear they have lost the ability to manage money, you’ve got to speak with an attorney who handles guardian or conservatorships. If you cannot afford to hire an attorney, every county has these services available as well.

Ideally, a spending plan will be developed based on their income and the person’s basic needs: food medical care, housing, etc. Attempt to do this with the person, so you can all agree if possible.

Family and friends need to have a dialog with them, to understand what they really want out of life, not what we want, what they want. It comes down to needs and wants and the reasonableness of both.

Jamie: As fiduciaries, we often recommend the True Link pre-paid Visa card for these people. It is a debit card allowing selection of a defined batch of necessities, vendors, dollar amount, type of merchandise, no over the phone purchases, no alcohol or tobacco. It prevents them from obtaining cash. Every time they use it the fiduciary or other designated people get a text on their phone.

Both Greg and Jamie cautioned, “Do not wait for things to improve by themselves.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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Regular readers of this column will recall that I strongly support structured settlement annuities for accident victims. But as you will see, while extremely rare, at times it is not all smooth sailing.

If the term “structured settlement” is new for you, let me explain why I believe most plaintiff’s attorneys in the country like this method of settling personal injury and workers compensation cases.

Recognized and encouraged by the Federal tax code since 1983, structured settlements are financially appealing for anyone settling a physical injury or wrongful death insurance claim. The Federal tax code gives you the choice to have some or all of your settlement funds used to purchase an annuity with a highly-rated life insurance company that will provide safe, tax-free income on a schedule you determine.

A structured settlement is like having your own pit bull who bares its teeth and growls when “family and friends” pressure an accident victim for a large loan. The annuity pays a specific amount on a certain time table, and this prevents the accident victim from becoming his own worst financial nightmare, because the amount of payments can’t be changed.

With Federal and State tax rates likely increasing, the prospect of long-term tax-free income is incredibly appealing. That’s why I have counseled accident clients for years to look at structured settlements’ benefits.

Every industry has its rotten apples

On Wednesday, Sept. 23,  financial broker Joe Gargan, who pled guilty in June to embezzling nearly $8 million meant for child victims of medical malpractice injuries, will learn his fate. Gargan was CEO of one of the country’s largest structured settlement companies, and according to his guilty plea, he used that position to siphon $6.9 million intended to purchase structured settlement annuities to benefit injured minors.

Gargan also admitted to embezzling more than $1 million from a hospital settlement that was supposed to purchase an annuity for a child’s benefit.

The Gargan scandal is the second time in 3 years that a structured settlement broker has been sentenced to prison for crimes involving insurance settlements. In July 2017, Michael Woodyard, a broker with structured settlement company Ringler Associates, pled guilty to a $4.6 million insurance fraud and was sentenced to 87 months in prison.

But as the Gargan and Woodyard felonies show, the structured settlement industry unfortunately has its share of unethical players. So if you’re settling an injury or wrongful death claim, here are a few ways to protect yourself.

Rule 1: Settlement money that funds a structured annuity must be sent directly to the life insurance company. The critical mistake defendants in the Gargan cases made was to send settlement money to his firm, not to the insurers that were to issue the annuities. This allowed Gargan, according to his guilty plea, to embezzle millions while concealing his activity through false documents showing that he had purchased the annuities.

Rule 2: Insist that your lawyer use a plaintiff broker to represent your interests. It’s not certain from Gargan’s guilty plea whether he represented the plaintiff or defense, though an industry insider tells me that he worked for the defense.

I’m also told that none of the cases had a broker representing the plaintiff. If they could have but did not, then attorneys for the accident victims made a huge mistake and could face being sued for malpractice.

As Peter Arnold, a respected structured settlement consultant, correctly notes, “For all but the smallest injuries, plaintiffs and their attorneys should insist on using their own structured settlement consultant in negotiations.”

Bottom line: Do NOT rely on the defense’s structured settlement broker any more than you would rely on the defense’s attorneys!

The insurance company issuing a structured annuity pays a commission (typically 4% of the annuity cost) to broker(s) involved. Your structured settlement broker will receive a portion (often half) of the commission so there’s no out-of-pocket cost to the plaintiff.

Rule 3: Deception between an insurer and the defense’s structured settlement broker could cost you. Sometimes plaintiff counsel might only rely on the details provided by the defendant’s structured settlement consultant.

You’ve got to make sure your attorney insists that all annuity pricing quotations, including injury details–which can be used to calculate the amount of the annuity–be submitted to you in writing. Your attorney should also insist that the insurer confirm in writing all information supplied by the defense broker. If the defense objects, find a plaintiff broker!

Rule 4: Be on the look-out for unethical conduct. While I’m a strong supporter of structured settlements, I’m appalled when industry players use obviously unethical practices.

Here’s a nice example of an arguable conflict of interest. For years, Pacific Life Insurance has been running junkets for favored structured settlement brokers at 5-star hotels in places like Bora Bora, Dubai, and the Maldives. Evidence appears to show that brokers have responded by channeling hundreds of millions in annuity sales to the company.

The losers are the accident victims, who might have been better off with an annuity from a competing insurer, as rates offered by annuity companies vary.  Senators Elizabeth Warren and Richard Blumenthal, if you’re reading this and would like more detail, please call my office.

Brokers who go on life insurance junkets are clearly violating the industry’s code of ethics, in my opinion. So, what should your attorney do? Have any broker state in writing whether he or she has been on an insurer junket or received freebies. Name the insurer. If the broker tries to convince you to use that insurer’s annuity, demand competing estimates from different companies.

Rule 5: Understand how your private data is protected and obtain this in writing. Some unethical structured settlement brokers pocket huge sums by selling client information to companies which then contact those clients and promise “quick cash” for selling future payment rights. This can completely destroy one of the main benefits of a structured settlement: preventing the injured person from squandering the money!

The money to be made from selling your information is jaw-dropping. John Darer is another respected structured settlement consultant who writes the industry’s all-important “Watchdog” blog. He recently reported on structured settlement brokers “trafficking hundreds or even thousands of names of annuitants, details of their annuities, annuity issuer, payment streams and contact information in exchange for hundreds of thousands or even millions of dollars.”

Before agreeing to work with a structured settlement broker, have them detail in writing how their firm protects your information. If someone at the firm misappropriates your information and you can show it, you can take the firm and the broker to court.

Structured settlements are an excellent way to ensure long-term financial stability. But there are bad apples in every industry. Accident victims and their attorneys must protect themselves.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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“I was in a car accident several months ago and hired a personal injury attorney almost immediately. Initially, she was very responsive, returned my calls promptly, keeping me informed of everything. Then, suddenly, silence. I leave messages, am promised a call-back, but nothing!

“Treatment for my injuries is on a lien basis with bills to be paid when the case is resolved, but now I don’t know what to do. Should I change lawyers? Thanks, Darlene.”

Unhappy or pressured to change lawyers?

I ran Darlene’s question by a friend of this column, Southern California personal injury attorney Shawn Steel. His law practice is unique in that he not only represents accident victims, but also health care professionals, “Who have been badly dealt with by lawyers refusing to honor their contracts with doctors to pay their bills when the case settles.”

Steel provided practical advice for health care providers facing that situation in a recent article I wrote, “When Lawyers Refuse to Pay a Client’s Doctor Bill”

As he explained, the question of “to change or not to change lawyers” comes up under two different scenarios:

–You’ve hired a lawyer on a contingent fee basis, but are not satisfied with the legal services provided, or;

–You are being pressured into changing lawyers by friends, family members or–which is illegal in most states–some other attorney who wants your case.

Steel set out four questions client often ask:

(1) Do I have to give a reason before changing lawyers?

(2) Will I owe the first lawyer for time spent on my case?

(3) Should I wait and see if things get better?

(4) I signed a lien with the lawyer to pay bills, but if I change attorneys, what happens to that lien?

“You do not need a reason to change lawyers, and what your reader has described is one of the most common – a failure to communicate, ignoring you,” Steel points out.

“But don’t fire your lawyer just because your phone call wasn’t returned immediately! You’ve got to be reasonable. And keep in mind that your old attorney has a right to be paid by the new attorney out of settlement proceeds.

“When you feel the relationship is a bad fit, end it immediately. Two or three months is no problem. Lawyers will take your case as not much of a fee has been earned in that short amount of time. Simply stated, the older the case, the less desirable it is to the new attorney and even good cases get rejected for that reason,” he underscores.

What Happens to the Lien I Signed with the First Lawyer to Pay My Bills?

Financially an auto accident can become a nightmare lasting years if medical and chiropractic bills aren’t paid. Clients often think, “But as I had a lien with the first lawyer, it automatically transfers to the second lawyer, right?”

“Unfortunately, that’s not the law,” Steel emphasizes.

“Changing lawyers extinguishes the lien. Unless a new lien is signed by everyone, a potential costly problem for the patient is around the corner, and this is my advice to health care professionals and their patients:

(1) Health care providers – When becoming aware your patient has a new lawyer, immediately get a new lien signed. If the attorney refuses, bill the client at once – don’t wait! Also, occasionally ask patients if they have the same lawyer.

(2) Patients – It is potentially damaging to your credit and even to the ability of getting a job in some circumstances–if your case has been settled without the health care providers being paid and you wind up being sued. If you change lawyers, immediately notify all of your health care providers of this fact, with the name, address and phone number of the new lawyer. If you do not, you’ll have to pay out of your own pocket and could be hounded by a collection agency or taken to court.

Resist Pressure to Change Lawyers

Everyone has a ‘know-it-all’ relative who will claim to know more that your lawyer, or has ‘a friend’ who is an attorney, ‘So just drop the lawyer you hired and go with my guy!”

“Clients hear that often,” Steel notes, and warns his own clients that before doing anything, when hearing such advice from family members, ‘Just talk with me.’

“But that’s tame by comparison to lawyers who illegally attempt to steal cases involving serious injury, where the settlement value can be extremely high,” he observes.

“There are predators out there, people who work for lawyers and get an illegal kickback. If you get approached, call your lawyer right-a-way, as it is illegal for anyone from another law firm to contact you if you are already represented.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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If you are a landlord–or plan to buy rental property–our story should scare you more than just a little, as the last thing you want is to be sued for a violation of the Americans With Disability Act which no doubt you’ve heard of.

And here’s a fact situation that is guaranteed to raise your blood pressure.

You’ve heard the term “Drive By Shooting,” where a car, building or person, is shot at by someone in a moving vehicle, making it often difficult to capture the perpetrator.

But have you ever heard of a “Drive By Lawsuit?”

Sacramento California attorney Cris Vaughan can tell you all about these suits which his law firm defends throughout the state.

“A ‘Drive-By’ lawsuit claims violations of the ADA by a person who does nothing more than drive by business without ever attempting to become a customer and there is no evidence of the individual ever being in their business.

“Business owners must hire an attorney to defend themselves where small and easily curable violations of ADA access requirements on the outside of their business that can be seen when driving by the property.

“Three law firms with less than twenty plaintiffs file the majority of the ADA cases in federal court. Twenty or more cases a month are filed using a single individual. California has a financial reward for the person who brings an ADA lawsuit, even for minor or purely technical violations, like a parking space being an inch too narrow.” Vaughan stated.

At least one individual law firm in California files more than one hundred ADA lawsuits a month using virtually identical language, changing little more than the name and address of the business in a boiler plate complaint. “In many cases, the lawsuit targets a small immigrant or minority owned business.”

Pay Up Now or Pay Thousands to a Lawyer Defending You

“The business either pays the settlement demand– frequently over $10,000–or spends thousands more fighting the lawsuit, or shutting down the business” Vaughan stated in frustration.

Unfortunately, the shakedown usually works, and it did with one of my clients, trying to sell their small motel. We were one of many victims of this incredible abuse of the well-intentioned ADA, until the Federal Courts in California and some other states put a stop to this thievery.

Never Even Set Foot on the Property

An Arizona lawyer and his wheelchair-bound client have used Google Earth to study swimming pool facilities at hotels throughout California.

The ADA requires hotels which have a swimming pool to be accessible to all guests. But how can a guest who is confined to a wheelchair get into a swimming pool?

The ADA requires hotels to install a pool lift to provide access to wheel-chair bound patrons. These lifts are easily visible on Google Earth.

Often city and county building code officers do not inform the owners of this requirement. In my town, they specifically told hotel owners that a lift was not necessary. That was bad, really bad advice.

If a wheelchair bound person checks into or tries to check into a hotel and discovers no lift at the pool, they have suffered a harm according to the ADA. Failure to have a lift is a clear violation of ADA access requirements and hotel guests would be well within their rights to file suit.

“But in these lawsuit, the plaintiff lived in Arizona, never left her home, but claimed an ADA violation because the hotel she saw on Google Earth lacked a chairlift! Her lawyer filed dozens of these questionable lawsuits in California Federal Courts against hotels all over the state!” Vaughan points out.

A Gun to Your Head

“Clients tell me ‘It feels like there’s a gun to your head. ‘Vaughan stated, adding “Many hotels simply settled these suits, paying $5,000 or more to the Arizona lawyer. But then a few attorneys who represented major hotels asked the Courts to dismiss these suits on the grounds of what is called Standing.

“That means, the plaintiff could not show that the lack of a chairlift actually harmed her, as she was never at the hotel, or in California, for that matter. But rejection of these lawsuits by the court came after many hotels just paid up.” he points out, adding, “These types of lawsuits are still going on today,” he concluded.

There is a lot more to the ADA, and next time, with Cris Vaughan we will look at common myths that could cost you big time. His website is adalegaldefense.com and he’s also on You Tube. By spending time there you will learn a lot and just maybe, keep yourself out of ADA lawsuit land.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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Today’s story will be of special interest to two groups of readers who are linked together by what is known as a lien, which I’ll explain in a moment. They are:

(1) People who were injured in an auto accident who lack good health insurance or adequate amounts of auto medical payments coverage but need treatment from a chiropractor, MD or physical therapist. They hire an attorney to file an insurance claim against the responsible party.

(2) Chiropractors, MD’s or physical therapists who provide treatment, and, as Los Angeles based attorney Shawn Steel adds, “Contractually–on a lien basis–agreeing to wait for payment of their services when the case is settled.”

An Enforceable Contract

Specializing in personal injury cases and representing chiropractors for over 35 years, Steel explains that a lien, “Is a binding, enforceable, written contract signed by the patient, attorney and health care provider requiring bills to be paid from the proceeds of settlement prior to the individual receiving any funds.”

But he was quick to point out, “That’s how it is supposed to work – it is what the law requires, but in my experience, over 3/4 of lawyers who handle personal cases on a lien basis flagrantly refuse to honor the lien and far too many health care professionals just don’t know what to do when they are stiffed, or their bill is cut to shreds.”

The recent example of our client, “Dr. S” is typical.

“My Polite Requests to Pay Our Bill was Ignored!”

I have a soft spot in my heart for chiropractors and respect their abilities. Years ago, a chiropractor delivered me from the worst and most painful stiff neck imaginable. I became a believer and we referred our auto accident clients to him for years, always receiving positive feedback. So, when a chiropractor is badly dealt with by a lawyer, I take that personally and that’s what happened to Dr. S.

His lien was signed by both a local attorney and the patient, but when the case was settled the lawyer refused to payment of the chiropractor’s bill. “We placed call after call to the lawyer’s office and did not even receive the courtesy of a return phone call,” Dr. S. explained, not only frustrated, but hurt.

I phoned my colleague and gave him 48 hours to have a check delivered to the chiro’s office or find himself in court.

Needless to say, the bill was paid at once–in full. But this should not have dragged on for so long, and that is Steel’s message to all health care providers who treat on a lien basis. “Understand your rights and the attorney’s legal obligation,” he underscores.

The Lawyer Is a Fiduciary – Do Not Let anyone Browbeat You Down!

“In all 50 states, the Doctor’s Lien, or Letter of Protection as it is also called in some states, creates a fiduciary relationship making the lawyer trustee of settlement funds for the benefit of the client, the doctor and, finally, the attorney.

“I find repeatedly lawyers insisting that the doctor cut his bill, but the attorney refuses to reduce his when the settlement is not as high as was expected – or that is what the lawyer tells the doctor. In the typical case this is inherently unfair, as the doctor has spent weeks or months in treating the patient, while the lawyer perhaps saw the client once and made two phone calls.

“There is nothing wrong with everyone taking a little less than full payment if the money just isn’t there, but I urge my doctor clients to stand up to strong arm tactics by going through these steps:

–When you get a phone call asking that you cut your bill, ‘Because the settlement was too low and I can only get you $1,000,’reply by stating, “Please send me a copy of the draft, settlement agreement and client’s proposed disbursement.”
“Remember, a lawyer can easily lie on the phone, but will hesitate to do so in writing. You have the legal right to see all of those documents and how funds are to be distributed.”

If that information is not provided, then, Steel recommends:

–Send a demand letter to the lawyer with a 7 day deadline. Attach the lien, your report and bill. In your letter state, ‘I am sure you are familiar with the Rules of Professional Conduct.’

–On the 8th day, file a complaint with the State Bar, send the attorney a copy of it and file your suit in Small Claims Court.

“You will get paid – and, if it goes to court, judges almost always rule in favor of the doctor,” Steel concludes. Shawnsteel.com is his website which I highly recommend.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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Later this month, Newport Beach Pacific Life will host a fabulous six-day event halfway around the world for the U.S. structured settlement industry.

According to the invitation, the gathering at the Four Seasons Maldives isn’t a junket but rather “an educational setting” to “exchange ideas on how to promote” annuity sales to accident survivors. Attendees are encouraged to bring a guest.

Since the Four Seasons advertises pristine, white sand beaches and turquoise waters, I suspect that settlement planners will do more than discuss insurance.

Pacific Life will also host U.S. structured settlement planners and their guests at a four-day gathering at the Four Seasons in Dubai, later this year.

Pushed toward a Pacific Life structured settlement annuity?

These trips raise a disturbing possibility: Will structured settlement planners push accident victims to certain companies even if others offer better or less expensive options?

If someone in your family has a structured settlement annuity from Pacific Life purchased in 2015 or after, can you be sure that your lawyer’s recommendation to go with them wasn’t influenced by a broker just itching to go on one of these trips?

Here are a few interesting numbers. Industry data from The Life Insurance and Market Research Association reveals that Pacific Life’s structured annuity sales dropped nearly 10 percent between 2013 and 2014.

But starting in 2015, when it announced a week-long industry gathering at the Four Seasons in Bora Bora, its sales surged from about $770 million in 2014 to nearly $1.2 billion in 2017, even as the overall structured annuity market was flat.

Lawyers expect settlement brokers to be fiduciaries for the client

Accident victim lawyers I know expect and view structured settlement brokers as acting in a fiduciary capacity for their clients and develop trusting relations with these people. Yes, brokers are paid fairly standard commission by the insurance companies who issue structured settlements, and that’s normal.

But if I knew that advice to influence my client to select a certain insurer had any connection with one of these incredible trips, it would be the last time I would ever use that broker.

While “Saturday Night Live” and Congress at times have a lot in common, one of the best things our representatives in Washington ever did for injury victims took place in 1983 when the tax code was changed to encourage structured settlements. This allowed an opportunity to put some or all of the settlement into an annuity that provides long-term financial support, completely exempt from both federal and state taxes.

Often clients must be persuaded to accept a structured settlement

Lawyers are fiduciaries, watching out for their client’s best interests with settlement funds and it is usually a challenge to persuade clients to consider protecting their future with a structured settlement.

Plaintiffs typically like the idea of taking as much cash as possible, which is generally the world’s worst decision. Hand most people several hundred thousand dollars and in less than three years it’s all gone; these people are likely to go on public assistance. However, a structured settlement can prevent such an awful outcome.

Time for the feds to take a look at these incentives

Congress has the power, and many would argue, the duty to investigate these incentives and the possible negative impact on accident victims.

Structured settlements protect the security of innocent people. That’s why both Congress and the structured settlement industry must pay attention to these troubling problems that are beginning to harm the industry’s reputation. Insurance incentive programs threaten to undermine confidence in structured settlements generally.

Congress needs to shine a powerful light on this situation. It may cause temporary pain in the industry but it will bolster long-term confidence in a program that has unmatched potential to help those in need.

Pacific Life’s response? – Where can this all lead?

So, what does Pacific Life have to say?

I left two voice mails and sent an email to Pacific’s man in charge of structured settlements, Geoff Kissel. He referred me to Steven Chesterman in their Communication Department, who emailed, “Wanted to let you know I received your message and we have no comment for your story.”

Finally, I would not be surprised to see these successful efforts to supercharge their structured settlement business result in class action litigation. In my legal opinion, thousands of annuitants could argue they were victims of a monumental consumer fraud and conflict of interest.

Because that’s what it smells of. And even if simply by appearance only, the harm done to the reputation of the structured settlement industry is significant.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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