Settlements used to be simple–pay the cash and close the file. Increasingly, that is not true, especially in large payment cases. For personal injury matters, structured settlements involving sophisticated periodic payments, qualified assignments and guarantees, reporting of malpractice payments, aggressively asserted lien rights of Medicare, Medicaid and other payers, tax filing requirements, and complicated rules to protect the rights of minors and incapacitated persons, have made many settlements much more complex. Non-compliance with some of these requirements can mean an unenforceable settlement or financial penalties. In employment cases, civil rights and tax laws need to be considered. In business and insurance coverage cases, the need for continuing business relationships and tax issues can dictate the terms of settlement.

Once the litigators have reached an agreement in principle on settlement, the presumption may be that the work is done. However, both plaintiff and defense counsel are often not fully aware of what it can take to settle cases involving these kinds of issues. To meet this challenge, the Kitch firm’s attorneys devote significant effort in keeping current on these issues, in developing procedures designed to glean and use the necessary information to draft release and settlement agreements in compliance with the current law. Sometimes that requires educating the attorneys litigating the case.

Release and settlement agreements in large cases generally involve structured settlements with periodic future payments. At Kitch, we pride ourselves on maintaining good relations with many major structured settlement companies that broker or provide the settlement annuities, and that recognize the firm’s drafting of the relevant documents as more than meeting the standards of their industry.

In connection with complex release work, our attorneys handle the following services:

– Negotiation of settlements, while also addressing sometimes sticky details like indemnification, responsibility for liens, and tax issues.

– Drafting or comprehensive review and, if needed, editing of releases to address tax law requirements, indemnification, lien payment responsibilities, complicated payment distribution provisions, and special features like guarantees, security interests and commutation.

– Drafting or comprehensive review and, if needed, editing of supporting documents such as waivers, discharge of liens (for lien claimants), Medicaid special needs, Medicare set-aside and other types of trust documents, qualified assignments and relevant court orders, to meet trial court and probate court requirements.

– Participation in court hearings involving settlements, i.e., placing settlements on the record, and seeking probate court concurrence when appropriate.

– Advising the client on NPDB reporting requirements concerning malpractice payments and IRS 1099 tax reporting obligations.

Complex Settlements

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