Part 2 - Personal injury damages

For the purposes of this Division, a “structured settlement” is an agreement that provides for the payment of all or part of an award of damages in the form of periodic payments funded by an annuity or other agreed means.

(1) The purpose of this section is to enable the court to give the parties to proceedings a reasonable opportunity to negotiate a structured settlement.

(2) A court that decides to make an award of personal injury damages in respect of future loss (not including interest) exceeding $100,000 must first notify all the parties to the proceedings of the terms of the award it proposes to make.

(3) In addition, if the court considers that the person may be a person in need of protection, the court is to notify the NSW Trustee and Guardian of the terms of the award it proposes to make.

(4) The notification must set out the amount of each component part of the proposed award in accordance with the requirements of the regulations and rules of court.

(5) In this section:

“person in need of protection” means a person who is liable to be subject to an order that the estate of the person be subject to management under the NSW Trustee and Guardian Act 2009 because the person is not capable of managing his or her own affairs.

A court may, on the application of the parties to a claim for personal injury damages, make an order approving of or in the terms of a structured settlement even though the payment of damages is not in the form of a lump sum award of damages.

An Australian legal practitioner must advise, in writing, a plaintiff who proposes to negotiate a settlement of a claim for personal injury damages about the following:

(a) the availability of structured settlements,

(b) the desirability of the plaintiff obtaining independent financial advice about structured settlements and lump sum settlements of the claim.

(1)   Clause 5 of Schedule 1 to the Legal Profession Uniform Law Application Act 2014 extends to an offer of compromise by way of a structured settlement on a claim for personal injury damages.

(2)   In that case, the court is to have regard to the cost to the defendant of the proposed structured settlement as compared to the lump sum payment of damages when determining whether a reasonable offer of compromise has been made.