Litigation

"You can have your payments increase to keep up with inflation and protect against rising costs. For example, a 3% increase in payments each year helps protect your spending power for as long as your structured settlement is in effect".Pressman Settlements website

Top NYSTLA donor Cybersettle Structured Settlements says on on its web site:

"Guaranteed payment increases of 2% - 3% annually, compounded, help protect your clients against inflation".

DOES IT????? 

Consumer Price Index  CPI-U  Source: InflationData.com

Jul-08  5.6%
Jun-08 5.02%
May-08 4.18%
Apr-08 3.94%
Mar-08 3.98%
Feb-08 4.03%
Jan-08 4.28%

2007 Avg 2.85%
2006 Avg  3.24%
2005 avg  3.39%
2004 avg 2.68%
2003 avg 2.27%
2002 avg 1.59%
2001 avg 2.83%
2000 avg 3.38%

Comments:

1. Judging by published inflation data for the first 7 months of 2008, rising inflation IS a problem.
2. COLA stands for Cost of Living Adjustment. The COLA offered with an annuity based structured settlement in the United States is fixed rate of increase that cannot change for the life of the contract.
3. With the exception of 2002, a 2% fixed increase (stated by Cybersettle (Pressman) as the lead end of an  narrow "acceptable" range of rates)  would not have provided adequate inflation protection taking into account the published averages of the last 8 years
4. Some inflation protection is possible by using Treasury Inflation Protection Securities (TIPS). With TIPS as an alternative "qualified funding asset" the principal adjusts with inflation/deflation and with interest applied semi-annually to the adjusted principal.
5. As an aside, in the United Kingdom it IS possible for tort victims to receive annuity based periodical payments that are linked to the Retail Prices Index (RPI)
6. Profoundly injured tort victims may face inflation rates in excess of the CPI-U measurement for goods and services related to their medical needs and prescription drugs.Please note that most structured annuity issuers offer adjustments as high as 6%, some higher.

It has been published on the NYSTLA website that Cybersettle gives $100,000 annually to New York State Trial Lawyer Association. Elizabeth Pressman, of Amherst, New York is President of both of the above cited companies.