lies, damned lies, and statistics structured settlements,.pdfVIP

Lies, Damned Lies, and Statistics? Structured Settlements, Factoring, and the Federal Government LAURA J. KOENIG* INTRODUCTION When Orion Olson was three years old, a dog assaulted him, causing serious vision and neurological damage and requiring plastic surgery. After Orion sued, the tortfeasor negotiated a settlement of $75,000 to be distributed over five payments scheduled to begin when Orion turned eighteen. Before receiving the first payment, Orion dropped out of high school and eventually became homeless. His first payment of $7500 disappeared quickly, and Orion needed cash. He saw an advertisement by J.G. Wentworth, a company offering to buy Orions rights to the last four payments in exchange for an immediate lump sum payment. Ofthe $67,500 still owed to Orion in future payments, J.G. Wentworth took $51,400 and dispensed a meager $16,100 to Orion. Within six months, the money was gone, and Orion was living out of his car. Raymond White lost part of his leg to a New York City subway train. He agreed to accept monthly payments of $1100 with annual 3 percent cost-of-living increases for the rest ofhis life. Six years after the accident, Raymond began selling his rights to the future monthly payments to J.G. Wentworth so that he could pay medical bills and buy a car. Of the $198,000 still owed to Raymond in future payments, J.G. Wentworth took $144,000 and gave Raymond a lump sum payment of $54,000. Raymond used the money for living expenses, but the money ran out. And Raymond had to rely on public 2 assistance to make ends meet. Each year, hundreds of thousands of people like Orion and Raymond are injured and sue for compensati