The History of Structured Settlements

Structured settlements have become increasingly common in the past few decades as a form of compensation for incidents involving personal injury, medical malpractice, and wrongful death. But how did structured settlements come about? And what laws at the federal and state level govern them? Here, we dive into the history of structured settlements.

The Origin of Structured Settlements

It was an unfortunate incident which spurred the creation of the structured settlement as a form of payment. In the 1960s, a pharmaceutical company created a drug called Thalidomide that was intended to treat morning sickness in pregnant women. However, the drug, which was used by thousands of women in Canada, also caused severe, life-threatening birth defects in their children. The company needed to compensate the survivors and help them to pay for the specialized health care that they needed. Because they would need care for the rest of their lives, a lump sum did not seem like a practical solution.

Although the first claims relating to the use of this drug began in Canada, similar cases were also filed in the United States. It was this case in particular which caused structured settlements to become a popular form of payment in medical malpractice disputes.

Federal Structured Settlement Laws

The history of structured settlements also includes the passing of numerous laws to protect the rights of individuals who receive structured settlements.