Most legal claims that arise from injuries caused by accidents in New York never get to the stage of a trial in a civil court. This is because the parties involved in the litigation decide to resolve their conflict by negotiating a settlement. Typically, in such settlements, the person who files the lawsuit, called the plaintiff, accepts an agreed-upon monetary compensation from either the defendant, or an insurance provider. In exchange, the plaintiff has to surrender their right to undertake any legal action in connection with the concerned injury or accident.
Most legal claims that arise from injuries caused by accidents in New York never get to the stage of a trial in a civil court. This is because the parties involved in the litigation decide to resolve their conflict by negotiating a settlement. Typically, in such settlements, the person who files the lawsuit, called the plaintiff, accepts an agreed-upon monetary compensation from either the defendant, or an insurance provider. In exchange, the plaintiff has to surrender their right to undertake any legal action in connection with the concerned injury or accident.
Reaching a personal injury settlement that provides a reasonable compensation for the damages suffered can be a challenge for most injury victims. If you have suffered an accident, and the opposing side has proposed a settlement offer, it is wise to consult a dedicated and seasoned New York City personal injury lawyer who can guide you on how to get the maximum possible sum of money through the settlement process.
What is a Structured Settlement in a Personal Injury Lawsuit in New York?
When a plaintiff agrees to give up the right to legal action in exchange for a sum of money in settlement, the payment may be of two types. In a lump-sum payment, the entire amount is received at once while in a structured payment, the amount is paid out regularly over a specified period of time. The structured settlement proves to be especially useful in cases where the plaintiff has to deal with a catastrophic injury that causes damage that is serious and permanent in nature. Such settlements involve the funding of an annuity policy for the plaintiff by the defendant’s insurance company. This is designed to generate a constant flow of income over the course of time specified as part of the settlement. By nature, these annuity policy contracts are complicated because a wide range of expenses have to be factored in to meet the plaintiff’s requirements. Besides, the tax implications of such an annuity plan must also be considered. This is why most plaintiffs prefer to consult a seasoned personal injury attorney or tax attorney in New York or a certified public accountant before they decide on whether to accept the proposed personal injury settlement.
What are the Benefits of a Structured Settlement in Personal Injury Cases in New York City?
Structured settlements are generally considered advantageous to the plaintiff due to the following reasons:
- They ensure that the plaintiff can receive a certain fixed amount in payment for the specified duration. This makes it easier for them to deal with the expenses that arise due to the serious or permanent nature of their injury.
- Annuity plans can be customized to meet the particular requirements of the plaintiff to deal with future contingencies.
- Structured settlements are likely to offer a significant tax benefit because under the US Tax Code, personal injury settlements qualify for the “tax-free” tag. There may be a few exceptions to this rule, however, and it is best to consult a qualified personal injury settlement lawyer in New York City to know more.
- Most states protect the annuities under state insurance laws so that the insurer’s obligations are covered. In the event of an insurance company turning insolvent, the policy claims will be paid by the guaranty association of that state, of course within the state’s specified limits.
- It may be possible to combine a structured settlement with a lump-sum payment so that immediate expenses such as medical and rehabilitation bills can be met.
- This type of a settlement allows the plaintiff to take benefit of any unexpected new development in the field of medicine that may prove beneficial in treating their condition.
What are the Limitations of a Structured Settlement in NYC Personal Injury Cases?
Despite the obvious merits of a structured settlement, there can be situations where this instrument can prove disadvantageous. Here are a few instances of such scenarios:
- The entire settlement amount is not tax-free; some parts of it such as attorney’s fees, punitive damages and damages awarded for purely emotional distress can be taxed.
- No one can predict how economic conditions will be in the far future and despite all precautions, recession or inflation in the economy could have a significant impact on the annuity paid. As a result, there is no guarantee that the payments received many years from now will continue to cover the plaintiff’s expenses and requirements at that time.
- Structured settlements are known to generally cost lesser than lump-sum settlements. When insurance companies do not disclose the amount they will spend for the annuity, it puts the plaintiff at a disadvantage, because they cannot get an exact picture of what to expect from the proposed settlement offer.
How to Assess the Worth of a Personal Injury Settlement Proposal in New York City?
When the defendant proposes a settlement through negotiation instead of letting the case reach a court trial, the plaintiff needs to assess the offer being proposed. Here are some of the factors to consider when deciding whether to accept such a proposal.
- What are your realistic chances of winning the case?
- What are the strengths and weaknesses of the evidence on your side as well as that possessed by the opposite side?
- What has been the settlement outcome or jury verdicts in previous similar cases tried by the court where your case is likely to come up for trial?
- What is the minimum amount that you are prepared to accept to avoid going to a trial?
- What resources does the defendant have at their disposal to meet your expectations of a settlement? What are the limits of their insurance coverage?
- What are you willing to compromise on to be able to reach a settlement? In settlement negotiations, both parties need to give up something to be able to reach a point that is acceptable to both sides.
- How much of the settlement amount will go towards the legal expenses and your lawyer’s fees?
- Will the settlement have an impact on your state and federal income taxes? How much percentage will you have to pay in income tax?
NYC Personal Injury Settlements can Prevent Unfavorable Publicity
When a case is tried in a civil court, the trial is open to the public and depending on the nature of the case, can invite scrutiny and attention from the media too. Persons who want to restrict personal information from entering the public domain, and those who want to avoid disclosure of business secrets therefore generally prefer to choose a settlement process. Most people are averse to unfavorable publicity and this, along with the relatively long and tedious nature of the trial process encourages them to opt for a negotiation that can result in a faster outcome through a settlement.
New York Rules on Shared Fault
Not all cases of personal injury are a clear case of negligence by just the defendant. It is quite likely that the plaintiff may share part of the blame for the incident leading to the legal claim. In such situations, under New York’s rules on shared fault, you are likely to receive a lesser amount in compensation for your claims. New York follows the pure comparative negligence rule which means that the final amount you receive in compensation will be less by an amount that reflects the percentage of your fault for the incident that caused the injury. If you are due to receive $200,000 in damages, and you are found to be 10% at fault for the accident, an amount of $20,000 will be deducted from the compensation, leaving you with $180,000 in damages. New York courts stick to this rule of shared fault but not all insurance adjusters who enter a settlement negotiation will look at the case through this same lens. In such situations, you need to have a skillful NYC personal injury attorney who can negotiate to win you the maximum possible compensation.
Our Experienced New York City Personal Injury Lawyers Can Help You
Serious personal injuries can have a debilitating impact on the rest of your life. The very least that a plaintiff who has suffered such an injury can expect is monetary compensation that can cover their expenses for a situation caused due to no fault of their own. Our compassionate and dedicated personal injury attorneys at Rosenberg, Minc, Falkoff & Wolff, LLP have worked with several families whose loved ones suffered injuries due to the negligence of another person. We have succeeded in winning maximum compensation for our clients, so that they have the means to deal with mounting medical costs and loss of income, apart from dealing with their pain and suffering. Our extensive network with the best experts in the fields of medicine, forensic pathology, and finance and accident reconstruction helps us build a strong and effective case for our clients, to ensure that they receive the compensation that is their rightful due. To know more about how we can help you do the same, call us today at 212-344-1000 or contact us online for a free and confidential consultation.
