Post settlement can be trickier than you think. Beware of the three major pitfalls.

1. They’re Real. They’re serious. They can be easily avoided. Copyright 2009 William B. Fazio © Post Settlement Pitfalls 11/2/2009 1 wbfazio@aol.com

2. Whether to settle or not, is the client’s decision. But… As their attorney you have a duty to inform. ABA Annotated Rules of Professional Conduct 11/2/2009 2 wbfazio@aol.com

3. A lawyer must tell the client enough about the “circumstances” of the settlement offer so that the client may consider alternatives including retaining other counsel or deciding not to settle. “Duty to inform” client of what? 11/2/2009 3 wbfazio@aol.com

4. 1. The client’s decision 2. The duty to inform 3. The circumstances Three post-settlement pitfalls 11/2/2009 4 wbfazio@aol.com

5. Are they aware of all options (cash, structured settlement, trust)? Do they understand them? Do you have it in writing? The client’s decision 11/2/2009 5 wbfazio@aol.com

6. Do you understand all of your client’s options? Do they need to be protected, is there a gal, what about public benefits? Are the technical issues (rated age, underwriter ratings, etc.) clear to you and your client? The duty to inform 11/2/2009 6 wbfazio@aol.com

7. ? The circumstances 11/2/2009 7 wbfazio@aol.com

8. Under what “circumstances” would you have failed in your duty to inform? A catch-all pitfall 11/2/2009 8 wbfazio@aol.com

9. A wealthy client who had been badly injured in an auto accident settles their case for $3 million dollars. Their attorney rejects structures as the client is sophisticated and can manage their own money. The client never sees any structure proposals. Ask yourself, was there a failure? 11/2/2009 9 wbfazio@aol.com

10. The defendant offers a structured settlement to a minor’s attorney and gal. the injured minor is on public aid. the parents reject the defense structure and petition the court to accept a cash settlement. Was there a failure? 11/2/2009 10 wbfazio@aol.com

11. Was there a failure? A minor plaintiff, with a family member appointed as guardian, is offered a structured settlement. The plaintiff attorney is directed to accept the offer, which they do and settle the case. 11/2/2009 11 wbfazio@aol.com

12. YES! In all three examples! The answer: 11/2/2009 12 wbfazio@aol.com

13. The client was not informed of the income tax and asset protection benefits provided by structured settlements. Despite the client’s financial savvy the attorney had a duty to inform. Wealthy Client. 11/2/2009 13 wbfazio@aol.com

14. By accepting a cash settlement the parents have eliminated their child’s eligibility for public aid. The attorney and gal failed to advise on this and offer a plan of their own that would have preserved the public benefits. Public Aid. 11/2/2009 14 wbfazio@aol.com

15. The attorneys failed in their due diligence to ensure that their client is receiving the best possible rate of return from the highest rated underwriter. Accepted Offer. 11/2/2009 15 wbfazio@aol.com

16. A lawyer must fully explain all ramifications of any offer of settlement. ----- ABA Center for professional responsibility: annotated rules of professional conduct. Looks like you’d better. Do you know it all? 11/2/2009 wbfazio@aol.com 16

17. They’re Real. Wealthy Client: liability on funds lost to taxes. Public Aid: liability on value of future medical care Accepted offer: liability on reduced annuity cost. 11/2/2009 wbfazio@aol.com 17

18. $ Measure of damages: Wealthy client: hundreds of thousands. public aid: more than four million. Accepted offer: more than fifty thousand. They’re Serious. 11/2/2009 wbfazio@aol.com 18

19. Use a settlement consultant. Put them to work with your other experts (life care planner, financial advisor, etc.). Have your consultant work directly with your client and provide written research, design criteria and proposals. They’re easily avoided. 11/2/2009 wbfazio@aol.com 19

20. wbfazio@aol.com Questions? 11/2/2009 wbfazio@aol.com 20