Jeremy Babener ’10 will take part in this year’s National Association of Settlement Purchasers Annual Conference in Las Vegas. On November 12 Babener will explain the findings of two forthcoming articles in his presentation “Factoring and the Structured Settlement Tax Subsidy,” and on November 13 he will participate in two sessions of a panel called “Rethinking Structured Settlements.”
Babener’s paper "Justifying the Structured Settlement Tax Subsidy: The Use of Lump Sum Settlement Monies,” which will appear in the Fall 2009 issue of the NYU Journal of Law & Business, features an analysis of historical dissipation studies involving injury victims. Conventional wisdom has long held that personal injury claimants will hastily squander lump-sum settlements. To help claimants avoid spending too quickly, structured settlements are subsidized at federal, state, and local levels by a tax exclusion for those that opt for periodic payments rather than a lump sum. Using data from 12 dissipation studies, Babener concludes that there is little statistical evidence that lump sums are truly dangerous.
“The absence of documented empirical evidence to support favorable tax treatment of structured settlements does not negate the validity of the consensus of professional opinion,” Babener notes. “However, from a policy standpoint, the fundamental importance of this subsidy demands more than anecdotal evidence.”
Patrick Hindert, co-author of the legal reference book Structured Settlements and Periodic Payment Judgments, has written extensively about Babener’s research on his blog Beyond Structured Settlements, calling his papers “seminal” and “important” additions to structured settlement literature. In an interview on the site, Babener tells Hindert that he learned about structured settlements as a clerk for the U.S. Department of Justice in 2008. In researching his paper, Babener reviewed historical data and questioned many industry members. “I learned the most about the industry by speaking with those that populate it, including settlement planners, attorneys, and insurance company representatives,” Babener said.
Babener will publish another article on structured settlements in the March 2010 issue of the NYU Journal of Legislation & Public Policy, titled "Structured Settlements and Single-Claimant Qualified Settlement Funds: Regulating in Accordance with Structured Settlement History."
Posted on November 10, 2009