Litigation

Does NSSTA Bomb on Structured Settlement Transparency Initiative or What?

By John Darer

• Does NSSTA not support transparency?
• Does NSSTA consider factoring as "promoting the establishment and preservation of structured settlements"?

A December 23. 2008 message by Christopher Diamantis, President of NSSTA to the entire NSSTA membership seems to suggest these very points.

Diamantis' message was created in response to a grass roots structured settlements transparency initiative which I started in November 2007 but has already been subscribed to by a number of structured settlement and settlement planning industry business leaders, including NSSTA members, and to which ALL settlement professionals, including Diamantis, have been invited to participate.

The Matter of Honor transparency initiative was started due to the following business practices:

1. Some structured settlement industry members, including NSSTA members, take kickbacks from factoring industry. One factoring broker put in writing a year ago that this number was 90% of her structured settlement industry clientele.These kickbacks, when broken out and itemized, make an already costly transaction more costly and most of these individuals are likely to have done little more than make a referral as stated by the same factoring broker in June 2008 in a video on the Summit Settlement Channel of the Legal Broadcast Network. There is a serious question as to whether or not the activity, the cost and all who are getting paid is fully disclosed to the tort victim or the Court by industry members.
2. Two NSSTA member structured settlement general agents  were reported to this author by a factoring source to have asked for kickbacks on top of the kickbacks being paid to that agencies' members. In fact a number of general agents invite factoring representatives to their annual meetings.
3. This author becoming aware of unilateral supply of settlement documents to factoring company by a settlement professional.
4. This author became aware of the possibility that an NSSTA member firm was selling names to a particular factoring company.

These practices undermine and/or have the capacity to undermine the confidence and trust of ALL stakeholders in the settlement process. This affects ALL settlement professionals especially  ALL of those NSSTA and other industry members who do not engage in these practices.

The NSSTA President and the NSSTA Board have repeatedly been made aware of these practices.

Despite being repeatedly made aware of these practices, the NSSTA President stated "I want to emphasize that by continuing your membership in NSSTA, you already have demonstrated and confirmed your continuing commitment to advancing the cause of protecting and preserving structured settlements and the long-term financial security that structures provide for injured claimants and their families"

With those words Chris Diamantis suggests to NSSTA members that operating your business under the cloak of the NSSTA is simply enough. Of course he is entitled to his own opinion. While I wish that ideal were true,  I respectfully disagree with him because it is flawed. The NSSTA's historically flaccid response to egregious violations of its Code of Ethics diminishes the value of the NSSTA badge to all of its members, including Diamantis and this author.

Here's one settlement professional's response to me after reading Tuesday's NSSTA announcement from Diamantis.

"John,

This (Diamantis') statement reads like this to me, "We are wusses, we are wusses, we are wusses...."  Seriously, what makes someone decide to write this letter?  It does not even address the issue.  Could it be that they do not understand the issue?  There must have been a meeting to decide whether they would support it or oppose it, the meeting must have gotten sidetracked, and this garbled notice resulted.  Here is how easy it should have been.  John Darer, a NSSTA member, has an initiative (click here for more details). He wants you to sign a pledge that says you do not take compensation on factoring transactions.  This notice is to let you know that we do not support or oppose this initiative and that we encourage each member to decide for himself or herself whether to take the pledge." 

If they are going to be too timid to step up to the plate, then they ought to be able to do that in one or two sentences.  "Your legal counsel" - geesh, what kind of a world do these people live in?  They seem to think you have to hire a lawyer to determine whether you will accept compensation from factoring companies.  And why do they attempt to speak in some kind of Orwellian double talk?"

Trial lawyers need to be informed AND WILL BE INFORMED of these practices so that (1) THEY can evaluate; and (2) THEY can make their own independent decisions about the importance of these issues "in the mix" of the decision about who to trust with their client's recovery. 

Another NSSTA member had a more succinct observation about the Diamantis NSSTA message in a telephone call to this author this morning:

" That was dumb!""

December 31, 2008 is only a week away.  Happy holidays!

THE FAQs on the Matter of Honor Project

Full post as published by Structured Settlements 4Real on December 24, 2008 (boomark / email).