The History of Structured Settlements
The History of Structured Settlements
Structured settlements were first popularized
in Canada during the 1960s as a way of managing payouts from settlements
involving thalidomide. German pharmaceutical company Grünenthal
manufactured the drug to ease morning sickness for pregnant women, but
the sedative caused severe, life-threatening birth defects in thousands
of children.
Thalidomide survivors require specialized health care and help with activities of daily living, and it quickly became clear that lump-sum settlements were not ideal for covering the cost of these lifelong needs.
Thalidomide survivors require specialized health care and help with activities of daily living, and it quickly became clear that lump-sum settlements were not ideal for covering the cost of these lifelong needs.
Although structured settlements for
thalidomide claimants originated in Canada, similar cases were later
filed in the United States, which popularized the use of structured
settlements in medical malpractice disputes.
Recognizing that personal injury victims could also benefit from this type of settlement, the federal government passed the Periodic Payment Settlement Act (PPSA) in 1983 to promote the use of structured settlements as a means of providing long-term, tax-free financial security to people seriously injured in accidents and their families.
Recognizing that personal injury victims could also benefit from this type of settlement, the federal government passed the Periodic Payment Settlement Act (PPSA) in 1983 to promote the use of structured settlements as a means of providing long-term, tax-free financial security to people seriously injured in accidents and their families.
Today, structured settlements are awarded in a variety of cases, and are
common for lawsuits settled out of court. Most claimants get to choose
between accepting periodic payments, taking a single lump-sum payout, or
some combination of the two.
However, in cases that involve minor children or persons found to be
incompetent, courts typically require structured settlements in order to
ensure the award money is disbursed and spent appropriately.
source : https://www.annuity.org/structured-settlements/history-and-case-examples/
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