What is a lump sum settlement?
Before 1979 in Canada a plaintiff was compensated for personal injuries with a one-time lump-sum payment representing the sum of all damages suffered by the plaintiff. Whether awarded by a court, or paid as a settlement by the defendant’s insurer, a plaintiff received one lump sum.It would then be up to the plaintiff to spend the money wisely.In 1978 the Supreme Court of Canada in the case of Andrews v. Grand & Toy Alta. Ltd., [1978] 2 S.C.R. 229, Dickson J. stated (at 236):The subject of damages for personal injury is an area of the law which cries out for legislative reform…When it is determined that compensation is to be made, it is highly irrational to be tied to a lump sum and once-and-for-all award. The lump sum award presents problems of great importance. It is subject to inflation, it is subject to fluctuation on investment, income from it is subject to tax… yet our law of damages knows nothing of periodic payments.
Before 1979 in Canada a plaintiff was compensated for personal injuries with a one-time lump-sum payment representing the sum of all damages suffered by the plaintiff. Whether awarded by a court, or paid as a settlement by the defendant’s insurer, a plaintiff received one lump sum. It would then be up to the plaintiff to spend the money wisely. In 1978 the Supreme Court of Canada in the case of Andrews v. Grand & Toy Alta. Ltd., [1978] 2 S.C.R. 229, Dickson J. stated (at 236): The subject of damages for personal injury is an area of the law which cries out for legislative reform…When it is determined that compensation is to be made, it is highly irrational to be tied to a lump sum and once-and-for-all award. The lump sum award presents problems of great importance. It is subject to inflation, it is subject to fluctuation on investment, income from it is subject to tax… yet our law of damages knows nothing of periodic payments. Why are structured settlements tax-free?
A lump sum settlement is an agreement where the insurer/employer agrees to pay the present value of the disputed claim at once, and his/her future obligations to the injured workers are fully and finally released. To determine the value, the sum of payments owed the claimant may not be discounted at a rate greater than eight percent per annum.
A lump sum is a large, fixed payment comprising of all of the alimony. Lump sum alimony is often provided instead of a property settlement when there is little or no property to divide. Lump sum alimony is unusual in that it is payable even if certain events occur that would normally cause the cessation of alimony, such as remarriage. Since lump sum alimony is in lieu of a property settlement or reimbursement alimony, the present or future status of the recipient does not affect the alimony. Lump sum can even be made payable to the estate of the recipient, should he or she die, if the alimony agreement so states. A lumps sum settlement on alimony is often less than what the receiving spouse would be paid over a longer period of time. The lump sum settlement is more enticing to the receiving spouse and in negotiation that carries a price along with it. This type of alimony agreement also provides stability for the receiving spouse. Financially it may not be the best choice, but emotiona
