You've seen the ads on late-night television: "We want to take advantage of your misfortune and rip you off when we buy your structured settlement! Call us now: J.G. Wentworth."
Okay, so they leave out the words between "to" and "we". Still, they want to buy your structured settlement. And I got the other part of the message by implication. (P.S. - Any company with the slogan "Get Cash Now" pretty much screams "Predator" to me.)
I didn't know all that much about the gory details of this industry, but thanks to this opinion, now I do. Fascinating stuff. As is the Court of Appeal's slapdown of a judge (Judge Simpson, up in Fresno) who was trying to do something about what he concluded was a manifestly abusive process. Reversed.
I will say one other thing as well: The tax angle on this stuff is also intriguing, and not something I previously fully understood. Sure, I knew that if you get a lump sum in a personal injury settlement, that amount is not taxable, but that any future returns on that amount (interest, dividends, etc.) are. Lest that be it, Congress then gets convinced to let people avoid taxation on all of it by entering into a structured settlement, so now your $500,000 tax-free is $1.5 million tax-free (including appreciation) over time. Sweet loophole. On the theory that if you don't have the right to the $1.5 million now, it's not really "yours" yet, and it's all on account of personal injury. Then, of course, people want to buy and sell the stuff. So we let them do that as well, since capitalism rocks. But that threatens the tax dodge. So Congress passes a new law: Even if you have the right to (or get) all the money now, it's still not taxable. Sweet!
Ever get the sense that there's -- oh, I don't know -- an industry somewhere pushing all these favorable tax rulings? Nah. Couldn't happen in a democracy. It's all neutral, publicly beneficial principles.