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                                         128 N.J.L.J. 9
                                        August 8, 1991


Appointed by the New Jersey Supreme Court


Advertising Results Obtained
in Personal Injury Matters -
Structured Settlements

    This matter originated as a grievance filed by a member of the public against two attorneys who caused an advertisement to be published in the television listings supplement of a local newspaper. The grievance alleged, inter alia, that the advertisement was misleading in that it claimed Respondents' personal injury client had been awarded $10.6 million when, in fact, the defendants had agreed to spend $1.7 million to purchase an annuity which would, over time, pay a total of at least $10.6 million.
    Upon completing its initial review, this Committee determined that the advertisement violated RPC 7.1(a)(1). In lieu of formal action, a letter was sent to Respondents requesting that they cease and desist from making use of this or any other advertisement which includes the aforementioned claim. Although this matter was ultimately disposed of informally, the Committee determined that this issue warranted a formal advisory opinion.
    Contrary to the representation in the advertisement, plaintiff was not awarded $10.6 million. Indeed, there was no award. Since the matter was settled, and not tried before a judge and jury, there was no award of damages as the term is commonly understood. Consequently, we hold that a statement to the effect that a settled matter resulted in an award of damages constitutes a false and misleading communication in violation of RPC 7.1(a)(1).
    More importantly, the personal injury matter was not settled for $10.6 million. Rather, the defendants agreed to spend $1.7 million to purchase an annuity which would, over the plaintiff's lifetime, pay a total of at least $10.6 million. In calculating fees in structured settlements, "value shall consist of any cash payment made upon consummation of the settlement plus the actual cost to the party making the settlement of the deferred payment aspects thereof," R. 1:21-7. Consequently, the Committee holds that a failure to disclose the existence and nature of a structured settlement in an advertisement concerning past performance constitutes the omission of facts necessary to make a statement considered as a whole not materially misleading, in violation of RPC 7.1(a)(1).

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