The Settlement Alliance

Avoiding Legal Malpractice: Why You Need a Settlement Planner

Avoiding Legal Malpractice: Why You Need a Settlement Planner

Oct 28, 2014

Texas Lawyer recently ran a story about a Texas business that sued two lawyers and their firms for legal malpractice. The basis of the lawsuits? Mistakes made in the settlement agreement.

In a string of cases involving allegations of fraud, a bankruptcy filing, and an alleged breach of a settlement agreement, the root cause of the many complications were chalked up to the details of the settlement agreement, in which:

“[…] defendant failed to account for or insert any language that would protect the plaintiff […].”

This brief statement highlights a major, yet common misstep in litigation—the failure to bring in a settlement planning expert for the plaintiff.

A properly completed settlement agreement thoroughly covers all of the details related to obligations, fees, releases and any limitations on those releases. It should protect both the plaintiff and the defense. Without proper settlement representation, however, both sides run the risk of signing off on an incomplete settlement agreement. This frequently occurs when the plaintiff in a personal injury or wrongful death claim wants to structure their settlement, only to find that the appropriate language was not included in the settlement agreement to allow for this option.

In a popularly cited example of a settlement gone wrong, Grillo v. Pettiete et al. (96-45090-92, 96th District Court, Tarrant County, Texas), the Grillo family had been awarded a settlement for their daughter Christina Grillo, a quadriplegia victim due to injuries sustained at birth. Life care plans for Christina had estimated her lifetime medical costs at approximately $20 million. The defendants had offered a structured settlement costing $1.2 million that would have paid out more than $100 million over Christina’s lifetime. However, a cash settlement was recommended by the child’s legal team and the case was settled for a lump sum cash payment of $2.5 million.

As is the unfortunate occurrence with so many who accept lump sums, the money didn’t last more than a few years. The Grillo family was left with millions upon millions of dollars’ worth of medical bills, and subsequently sued their legal representation for negligence and legal malpractice.

The lesson in all of this? Bring in a settlement expert as early as possible.

Not only will a settlement planner review all medical and financial needs of the plaintiff in a personal injury or wrongful death case, but in all types of cases, the settlement planner can ensure that the proper language is included in the settlement agreement to protect all parties involved.

We are proud to partner with the highest rated structured settlement providers in the industry:

  • American general Life Companies
  • Berkshire Hathaway Structured Settlements
  • Liberty Life Assurance Company of Boston
  • MetLife
  • Mutual of Omaha
  • New York Life
  • Pacific Life
  • Prudential