The list of adverse health impacts associated with childhood lead exposure is seemingly without end, but perhaps the most serious are the neurological effects. Even what were once thought to be harmless levels of lead exposure can, in a child with a developing brain, lead to irreversibly damaged cognitive abilities. Those who suffer childhood lead poisoning can see lowered IQs, impaired concentration and memory problems, among other deficits. They also frequently exhibit behavioral and psychological impacts, including hyperactivity, impulsive decision making and decreased ability to act independently.
It is the enormity of lead's ill effects — and their economic consequences for victims — that prompted the Maryland Court of Appeals four years ago to throw out strict liability caps in many lead poisoning cases. And it is the very nature of those effects that has prompted many of the judgments and settlements entered in lead poisoning cases to be paid not in at once but over the course of a victim's lifetime. Someone with diminished mental capacity, reduced independence and poor impulse control is often better served by what's known as a structured settlement rather than a lump sum payout. Lead's effects don't go away, and neither do the economic needs that arise from them.
That's what was so disturbing about the Washington Post's report Wednesday about a burgeoning industry of firms seeking to buy out those who have received lead paint structured settlements, primarily in Baltimore, typically for pennies on the dollar. The Post's Terrence McCoy details case after case of Baltimore lead poisoning victims — including Freddie Gray and his sisters — who agreed to buyouts without a full understanding of their consequences and without any kind of meaningful protection from the legal system.
Rep. Elijah Cummings has pledged to investigate and pursue federal reforms if necessary, but state leaders need to take up the issue as well. As the General Assembly considers legislation in response to Gray's death and the subsequent Baltimore riots, reform of Maryland's structured settlement buyout restrictions needs to be on the agenda.
The Post analyzed dozens of buyout offers made by one Maryland firm, Access Funding, and found that they typically amounted to about 33 percent of the present value of the structured settlements, and sometimes much less. We'll grant two points made by the industry. First, investors seeking to buy out these settlements have reason to discount from their present value because there is some risk involved, primarily that the recipient will die before the structured settlement runs its course. And second, settlement recipients may have legitimate reasons for accepting a smaller amount of cash up front. If selling off part of the settlement enables a family to move into lead-free housing, it might be worth the long-term sacrifice.
But such a decision is a monumental one whose implications may not be completely obvious to the average person, much less someone whose mental and decision-making capabilities are impaired, and some deals are better than others. That's why state law includes a couple of protections: Those opting to sell their settlements must be counseled by an independent professional adviser, and the proposed sales must be approved by a judge.
But The Post's reporting suggests a breakdown on both counts. Mr. McCoy's review of documents revealed that a single adviser had worked on dozens of settlement buyouts for Access Funding, a circumstance for which neither the company nor the attorney, Charles E. Smith, offered much explanation. In all instances, according to The Post, Mr. Smith provided identical letters attesting that the settlement recipients understood the implications of the proposed transactions and that he was not affiliated with Access Funding. Mr. McCoy also found that a single judge in Prince George's County, Herman C. Dawson, had presided over 160 structured settlement purchase applications by Access Funding since 2013, approving 90 percent of them. One was Freddie Gray's.
The pattern described in The Post strongly suggests that vulnerable people are being taken advantage of. Two reforms to Maryland's law could help. First, petitions should be filed in the jurisdiction where the settlement recipient lives. Lead paint poisoning in Maryland is predominantly a Baltimore problem, and we suspect judges here, who are more familiar with the issue and its impact, would scrutinize settlements more closely. And second, those proposing to sell all or part of their settlements should be required to appear in court. A conscientious judge should be able to determine through in-person questioning whether a petitioner understands the implications of the proposal much more effectively than through an affidavit signed by some third-party adviser.
The recipients of structured settlements, provided they are adults and not judged incompetent, are allowed to do with their money what they will, but the law is clearly not providing them with enough protection. Maryland can and must do better.