Editing Structured settlement (section)

{{Short description|Negotiated financial or insurance arrangement}}
{{Distinguish|Settlement (structural){{!}}Structural settlement}}

A '''structured settlement''' is a negotiated [[finance|financial]] or [[insurance]] arrangement through which a claimant agrees to resolve a personal injury [[tort]] claim by receiving part or all of a [[Settlement (litigation)|settlement]] in the form of periodic payments on an agreed schedule, rather than as a [[lump sum]]. As part of the negotiations, a structured settlement may be offered by the defendant or requested by the plaintiff. Ultimately both parties must agree on the terms of settlement. A settlement may allow the parties to a lawsuit to reduce legal and other costs by avoiding trial.<ref name="Tort Law">{{cite book|last=Edwards|first=J. Stanley|title=Tort Law for Legal Assistants|year=2009|publisher=Cengage Learning|location=Clifton Park, NY|isbn=978-1-4283-1849-6|pages=197–8}}</ref> Structured settlements are most widely used in the United States, but are also utilized in Canada, England and Australia.

Structured settlements were first utilized in [[Canada]] as part of the settlement of birth defect claims arising out of pregnant mothers ingesting [[Thalidomide]].<ref>{{cite book |last=Hindert |first=Daniel |title= Structured Settlements and Periodic Payment Judgements |year=1986 |publisher= Law Journal Press |location= New York, NY |isbn=1-58852-037-4 |pages=1–36}}</ref> Structured settlements are now used in a wide variety of types of lawsuit settlements such as aviation, construction, auto, medical malpractice and product liability.

Structured settlements may include [[income tax]] and [[Spendthrift trust|spendthrift]] provisions. Often the periodic payments will be funded through the purchase of one or more [[Annuity (US financial products)|annuities]], that generate the future payments. Structured settlement payments are sometimes called periodical payments, and when incorporated into a trial judgment may be called a "structured judgment".<ref>{{cite journal|last1=Riccardi|first1=Anthony H.|last2=Ireland|first2=Thomas R.|title=Structured Judgments and Periodic Payments in New York: A Unique and Complex System for Tort Awards|journal=Journal of Legal Economics|date=Fall 2000|volume=10|issue=5|url=https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&doctype=cite&docid=10+J.+Legal+Econ.+55&srctype=smi&srcid=3B15&key=bc7e6eee8746c99e0740c1d75ac4e396}}</ref>