Many
civil cases, especially those related to accidents and
personal injury, never
actually make it to trial. This is because the parties usually reach a
settlement before. This is what we can describe as a structured
settlement.
A Structured Settlement is a
payment or compensation paid by one party to another in the event of an unfavorable accident or injury caused to someone. It may be voluntary or it
could be the result of a legal battle where the aggrieved party is paid the sum
for the harm done against him/her.
Structured
Settlements can be paid at once as a single payment. There is also an option of
paying it in installments. This may or may not be subject to conditions which
are previously agreed upon by the parties. This is actually quite a frequent
occurrence. The ones paying the compensation usually enlist the help of an
insurance company to pay the structured settlement in regular equal installments. A major advantage of this method is that there is proof of the
transaction being made, hence there can be no conflicts later.
Now
that we know exactly what structured settlements are, we can evaluate it on the
basis of some advantages and disadvantages.
The
most important advantage of structured settlements is that it provides the
aggrieved party with instant help or relief. Most often, the settlement is paid
out as a combination of a lump sum and installments. This is helpful as the
person who was subjected to the accident can pay medical bills or any other
expenses which may have resulted due to the mistake of the guilty party. Also,
the installments can provide a steady income to the aggrieved, especially if he
or she is unable to work due to the accident.
The
downside, however, is that once the instalments or the lump sum has been paid
out, the aggrieved cannot seek any further remuneration, even if the accident
continues to affect the person. If any further sum is claimed, it may be termed
as exploitation or extortion.
What
are the types of cases where structured settlements are applicable?
1.
Individual
injury: the aggrieved party can claim compensation based on the harm caused to
him or her. The ones responsible for the harm have to pay the compensation in
the form of a structured settlement.
2. Workers’ compensation: when a worker is
injured while on duty, he or she can claim compensation from the employer
company, especially if the worker is unable to continue work. This is only
applicable if the worker suffers injury while on duty.
3. Hospital malpractices: in India,
negligence by hospitals is a criminal offense and even has a set of penalties
enlisted. Patients or their families can claim compensation if any malpractices
are observed.
