The court determined whether part of the funds should be structured or managed through a trust
In a recent ruling, the Ontario Superior Court of Justice has approved a settlement for a plaintiff suffering from cognitive disabilities following a pedestrian-motor vehicle accident.
In Kennedy v. Genno, 2024 ONSC 2317, the sole issue the court had to determine involved the most effective method to manage the $200,000 meant for the plaintiff. The court considered whether these funds should be structured or managed through a "Henson Trust." The plaintiff’s lawyer advocated for the trust, suggesting it offers more flexibility and suitability for addressing the plaintiff's immediate and future needs.
During the proceedings, various structured settlement options were presented, ranging from 10 to 20 years with different payment intervals. However, the plaintiff’s lawyer highlighted several complexities with structured settlements, including inflexible payment schedules that may not align with the plaintiff’s actual needs, potentially necessitating additional financial management.
The plaintiff's father, who also served as his litigation guardian, supported the use of a trust, arguing that a trust would provide more security and flexibility, allowing the funds to be invested and grow until needed by the plaintiff. Structured settlements were acknowledged as a secure and established investment tool for personal injury cases, offering tax-free, periodic payments.
The Superior Court noted that under rule 7 of the Rules of Civil Procedure, which addresses settlements involving parties under disability, funds are typically paid into court unless otherwise ordered by a judge. This rule was a foundation for the court's decision-making. Moreover, the court also considered s. 6 of the Court Proceedings for Automobile Accidents Regulations, which mandates periodic payments for settlements over $100,000 under certain conditions, including the plaintiff's management capabilities.
The court indicated openness to further submissions from the plaintiff’s lawyer regarding the application of these regulations before finalizing the decision on the structure of the payments. The court emphasized that, based on the evidence and the law, the most appropriate payment period would be 15 years, pending further review.
Ultimately, the court approved the settlement amounting to $350,000 and designed $200,000 of the settlement funds for the plaintiff’s care and needs. The court also reviewed the proposed legal fees of $57,079.45 and disbursements of $92,920.55, deeming them fair and reasonable concerning the services provided by the plaintiff's lawyer.
