ANNAPOLIS, Md. (AP) — Maryland’s attorney general urged lawmakers on Thursday to give his office the ability to regulate deals offered by businesses that buy legal settlements at steep discounts from lead poisoning victims, such as Baltimore’s Freddie Gray.
The measure, which had a hearing before lawmakers, would require that courts find the transfer of settlements to be in the best interest of the injured person. Cases also would have to be decided in the court of the county where the injured person lives, so companies couldn’t bring cases solely to one judge friendly to their proposals.
“We want to make sure that the people who have suffered from lead paint poisoning or have been the victims of an automobile accident don’t have their futures stolen from them,” Attorney General Brian Frosh said at a news conference.
The legislation was submitted to the General Assembly at Frosh’s request.
In August, The Washington Post reported that Gray, whose death after he was injured in police custody last year prompted riots, had agreed in 2013 to sell $146,000 worth of future payments in his structured settlement for about $18,300. The newspaper detailed how people are not getting counseling when selling settlements. Gray’s sisters also agreed to deals, in which they sold settlements of $435,000 — with a present-day value of around $280,000 — for about $54,000, the Post reported.
Structured settlements are like an annuity, in which someone receives payments over a period of years rather than one lump sum.
“Unfortunately, predators persuade them to give up those structured settlements for pennies on the dollar,” Frosh said.
While structured settlement payments can be helpful when the payee needs quick money for buying a house or car or paying for school, critics point to abuses in recent years that indicate victims have been exploited.
The attorney general’s office conducted an investigation into 171 structured settlement cases in which one company or some of its related entities bought settlements from injured victims. A total of $21 million in present-value settlements were purchased from victims for $6 million, Frosh said.
“That’s like me saying to you: ‘Look, I will give you six dollars for your $20 bill.’ Nobody who understands that deal will take it,” Frosh said.