The claims that we deal with tend to have a lump sum equivalent value of hundreds of thousands (and more commonly millions) of pounds. That is what a life changing injury may well equate to when the lost earnings, care, equipment, therapies, and accommodation costs are factored in across the injured person’s life.
For most people having that sort of sum to manage, and to preserve will be beyond daunting. Typically, some part of the award may be paid on an annual basis for the rest of the injured person’s life and pursuant to a Periodical Payment Order (‘PPO’), which demands a level of understanding and engagement that would push most people’s intellectual limits and stamina. In short financial advice is essential.
The need to take independent financial advice will always be advised by a solicitor engaged in pursuing a spinal cord injuries compensation claim. And it is not just any financial advice. As with all things where spinal cord injury is concerned, the need for specialist experienced and expert advice from an advisor who has helped others in a similar situation cannot be emphasised enough.
That input is usually necessary from the outset. Most people who suffer a spinal cord injury are concerned about how they will pay for what they may need post injury, and often where their ability to earn an income from employment is much reduced. Rehabilitation centre teams are usually very good at ensuring the injured person can access benefits that may be available to them, but it can often be sensible to explore whether a financial advisor might be able to help even at this early stage. Rearranging financial priorities; accessing overlooked insurance policies (taken out by the individual or perhaps their employer); managing savings and investments already in place; working through ways of meeting the needs of dependants; and how a partner’s, spouse’s and or other family member’s finances might be managed to accommodate the new situation can often identify solutions to problems that may not then arise.
Often at the outset of a compensation claim it is important to think about whether powers of attorney might be helpful in managing finances on a practical level; and it may well be sensible to begin thinking about Personal Injury Trusts which if put in place can preserve an entitlement to means tested benefits even where compensation payments are made on an interim and or final basis. Of course, the Trustees are likely to need independent financial advice to ensure that the objectives of the Trust (which in broad terms will be to manage the Claimant ‘beneficiary’s’ finances) are met. It can be important to have the financial advisor; wills trusts and probate team and the litigation solicitor all working in tandem even at an early stage. That is particularly so where an early admission of liability might be possible to achieve and where an interim payment on account of damages may be arranged.
Often, particularly in clinical negligence claims where liability is robustly defended and trials of preliminary issues are common; settlement can happy quickly where joint settlement meetings or mediations are diarised. Having an awareness that a substantial sum of money may be received at or shortly after the joint settlement meeting or mediation and that it will need careful management imminently is important. It can often be helpful to have a financial advisor’s input at or around the settlement discussion. It is particularly important where deciding whether a lump sum or periodical payment order (PPO) might be more advantageous to the Claimant is an issue. What sort of return a lump sum might need to generate to ensure the Claimant’s lifelong needs are met requires the financial advisor to have a good grasp of what those needs are, how and when they can be met, and what prudent investment may or may not achieve based on their experience and expertise.
When compensation payments are eventually made, the financial advisor will work closely with the Claimant and the Trustees of any Personal Injury Trust in place. The Claimant is free to use the compensation sum as they please, but inevitably ensuring lifelong needs can be met requires sound financial advice and planning. The financial advisor often remains engaged with the Claimant for many years after the settlement, and will also ensure that any periodical payment due each year is received, and in the correct amount.
To read more about Brethertons Spinal Cord Injuries Team - https://www.brethertons.co.uk/site/services/life-changing-injury-solicitors/spinal-injury-solicitors/
To follow us on Twitter - @neurolawyer
To contact us – telephone 01788 557617, or email jonrees@brethertons.co.uk or sianbuxton@brethertons.co.uk or allisonfitchett@brethertons.co.uk.
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