What is the impact of a structured settlement where a plaintiff receives a lump sum award for future care costs?

Nova Scotia, Canada


The following excerpt is from L. M.M. v. Nova Scotia (Attorney General), 2010 NSSC 44 (CanLII):

By contrast, under a structured settlement, the plaintiff receives the damage award "in the form of tax‑free periodic payments, thus avoiding the possibility of dissipation of a large lump sum payment." (Remedies in Tort). As McLachlin J. (as she then was) said, for the court, in Watkins v. Olafson, 1989 CanLII 36 (SCC), [1989] 2 S.C.R. 750, [1989] S.C.J. No. 94, at paras. 7-8: The imperfections of a lump sum, once‑and‑for‑all award, as a means of providing for a plaintiff's cost of future care have often been noted. Where the injury is serious and the period of time for which care must be made lengthy, a large number of variables enter into the calculation. Should the plaintiff live longer than projected, or earn less on his capital than expected, he will run out of funds for his care. On the other hand, should chronic illness force him to live in an institution rather than his own home, or should he die earlier than forecast, the funds provided may turn out to be excessive, resulting in a windfall for him or his heirs at the defendant's expense. Considerations such as these support the conclusion that in cases where care must be provided for a long period in the future, periodic payments are more consistent than the lump sum rule with the fundamental principles upon which the assessment of damages for personal injury are founded ‑‑ the basic concepts of restitutio in integrum and full but fair compensation. The whole basis of the claim advanced by the appellant is that in order to provide adequately for his future care he requires a monthly stream of income indexed for inflation for the rest of his life. Periodically paid sums capable of adjustment in the event of changed circumstances best ensure that this need will be met, given the impossibility of predicting the future with any real accuracy. At the same time, it is urged, the result would be fair to defendants, ensuring they pay only what is actually required.

Other Questions


What is the impact of a party's financial circumstances on the award of costs in a personal injury case? (Nova Scotia, Canada)
What is the impact of the ever rising and escalating cost of litigation on a plaintiff's ability to settle? (Nova Scotia, Canada)
Is there any difference between a plaintiff and a defendant in the award of costs under section 40 of the Canadian Personal Injury Act? (Nova Scotia, Canada)
What is the tax impact of a lump sum retroactive spousal award? (Nova Scotia, Canada)
What are the benefits of a structured settlement or periodic payment of damages? (Nova Scotia, Canada)
What is the cost and delay of a new application in a different way than a streamlined, more cost-effective application? (Nova Scotia, Canada)
Is a court bound by the principles of law to award costs in a personal injury action? (Nova Scotia, Canada)
What are the consequences if a party rejects an offer of settlement that subsequently exceeds the award of the court after trial? (Nova Scotia, Canada)
What is the test for a cost award? (Nova Scotia, Canada)
In what circumstances will the court award costs in a matrimonial matter? (Nova Scotia, Canada)
X



Alexi white


"The most advanced legal research software ever built."

Trusted by top litigators from across North America.