Structured Damages Definition

A structured damage award is an alternative to a lump sum settlement made in a lawsuit, where the payments are made in installments, or as an indefinitite amount on an ongoing basis. They are also referred to as structured settlement awards. Certain tax benefits may accrue to the plaintiff from a structured damage award.

Because it is tailor-made for individual cases, the structure may also include some immediate payment to cover special damages. It is possible to receive cash for structured settlements by selling them to a broker who buys annuities. Structured settlements are usually based upon a mathematical computation that takes such factors as the plaintiff's life expectancy and inflation into account.