Definition:
Normally, a plaintiff that wins a monetary award is entitled to collect the entire amount awarded as a lump sum. Some states, however, permit or require structured settlements; Instead of receiving one lump-sum payment, the award is paid out over many years. This is a similar concept to state lotteries that allow you to choose a cash option or get yearly payments.
Pros:
Smaller defendants won't have to sell off their assets to pay a large jury award in one lump sum. Plaintiffs can't squander their entire award, leaving them unable to pay for future medical expenses.
Cons:
Plaintiffs with a great deal of immediate expenses, like medical bills, may be unable to pay them in a timely manner. In some cases, if the plaintiff dies before the payments end, the defendant gets to pocket the money instead of paying it to the plaintiff's family.
Controversy:
Tort reform advocates claim that structured settlements will keep small businesses from going under if they're hit with a large jury verdict. Others point out that lengthy structured settlement plans are inherently unfair to people with short or diminished life expectancies.
For More Information:
Have It Your Way (PDF File)
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