Personal Injury

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bond1234567890

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The most common types of personal injury claims are road traffic accidents, accidents at work, tripping accidents, assault claims, accidents in the home, product defect accidents (product liability) and holiday accidents. The term personal injury also incorporates medical and dental accidents (which lead to numerous medical negligence claims every year) and conditions that are often classified as industrial disease cases, including asbestosis and mesothelioma, chest diseases (e.g., emphysema, pneumoconiosis, silicosis, chronic bronchitis, asthma, chronic obstructive pulmonary disease, and chronic obstructive airways disease), vibration white finger, occupational deafness, occupational stress, contact dermititis, and repetitive strain injury cases.
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Aside from compensation for injuries, the injured person can also get compensated for how the injuries have affected his or her life. An example, a keen cricketer suffers a wrist injury which prevents him from playing cricket during the cricket season. This can be compensated for, over and above the award for the injury itself. This is called loss of amenity, and the award for loss of amenity is part of the claim for pain, suffering and loss of amenity.[5]

In the same manner the injured person can also be compensated if, as a result of the injuries, there has been an inability to doing work which was previously really enjoyed. This is called loss of congenial employment.
 
"A trust does not need to have a specific generic title or be one sort of trust or another at law to be a personal injury trust. It is the source of the trust fund which determines the trust's nature ... needs ... relevant circumstances and the relevant law should dictate the type of trust. But whatever legal type of trust it is, if it is funded by an award of compensation for a personal injury then it will be a personal injury trust." Page 3 Coldrick on Personal Trusts - Fourth Edition (Ark Group 2008).
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• It is constituted exclusively by funds derived from a payment (or payments) made in consequence of a personal injury e.g. compensation for a road traffic accident. • The person founding the trust (called 'the settlor') will be the injured party (That is except in limited circumstances involving an official compensatory body such as the Criminal Injuries Compensation Authority). • The person founding the trust from their payment must also be the sole beneficiary or at least one potential beneficiary of the trust. (If they are not then the purpose of the term is no longer practically relevant).
This is all important because it means that a trust does not need to have a generic title/label or be one particular type of trust or another at English law to be considered a personal injury trust. It is or is not a personal injury trust on account of its source and the involvement of the injured settlor.
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The expression personal injury trust is a legal 'term of art' found in the context of the modern English law of trusts (also applicable, where relevant, to Wales, Scotland and Northern Ireland).

A personal injury trust is a form of 'trust', a legally binding arrangement, where funds are held by persons called 'trustees' for the benefit of another or others upon the terms of a document called a 'trust deed'.

"A trust does not need to have a specific generic title or be one sort of trust or another at law to be a personal injury trust. It is the source of the trust fund which determines the trust's nature ... needs ... relevant circumstances and the relevant law should dictate the type of trust. But whatever legal type of trust it is, if it is funded by an award of compensation for a personal injury then it will be a personal injury trust." Page 3 Coldrick on Personal Trusts - Fourth Edition
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The award placed in the personal injury trust may be negotiated or mediated and no Court Order making an award is required to facilitate a personal injury trust unless the compensated person is either a minor or mentally incapable of managing their own affairs. • Cases involving minors will involve the High Court agreeing to the foundation of a personal injury trust. • Cases involving mentally incapable persons will involve the Court of Protection agreeing to the foundation of a personal injury trust.
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Personal injury trusts usually carry no UK tax advantages. Compensated people need access to their award via their chosen trustees. Thus it is essential that they retain an interest as a named beneficiary in the award which they settle to form the trust fund.

The UK taxation anti-avoidance rules prevent tax advantages being given to such 'settlor interested' trusts. They apply to settlor interested personal injury trusts in the same way as they apply to trusts founded from non-personal injury related funds.

Personal injury trusts can create adverse tax consequences under UK tax law if the wrong sort is chosen. For example if an award of more than the 'nil rate band' for inheritance tax is placed in a discretionary trust or (since March 21 2006) an ordinary life interest trust an inheritance tax charge on the surplus becomes due immediately. The limit is £325,000 for the 2009-10 tax year. Above that a 20% charge at the inheritance tax "lifetime rate" will apply to the surplus.
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The expression personal injury trust is a legal 'term of art' found in the context of the modern English law of trusts (also applicable, where relevant, to Wales, Scotland and Northern Ireland).
A personal injury trust is a form of 'trust', a legally binding arrangement, where funds are held by persons called 'trustees' for the benefit of another or others upon the terms of a document called a 'trust deed'.
A trust does not need to have a specific generic title or be one sort of trust or another at law to be a personal injury trust. It is the source of the trust fund which determines the trust's nature ... needs ... relevant circumstances and the relevant law should dictate the type of trust. But whatever legal type of trust it is, if it is funded by an award of compensation for a personal injury then it will be a personal injury trust.
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As we would be setting up a trust, you need two people to act as trustees. Usually one of these people would be you. The other person can be anyone over 18 years old, and most of our clients usually have a family member act as trustee with them. A solicitor can act as a trustee for you. However, we charge for this and we would only really recommend that we act for you if you are going to receive in excess of £100,000 in compensation money.
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You then need to open up a bank or building society account in the names of the trustees. Ideally the account should be in the name of 'The Trustees of the (your name) Personal Injury Settlement'. However, provided that it is a joint account in the names of all of the trustees it should be fine. From experience we have found that some banks and building societies are better than others at setting these accounts up. Some will know what you are asking for straight away and others may not. If you have any problems setting up an account then you should get in touch with us and we will help as much as we can and point you in the right direction. We will speak to the bank you have chosen to ensure you are getting the right account but we can not, however, set up the account for you as the bank will want to see you and the other trustee(s) in person and will also require you all to bring ID evidence similar to the ID evidence we require. They may also want to see a copy of the trust deed, which is why we would send you a certified copy.
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The money is yours. If you do not spend the money it will sit in the bank / building society and gain interest. If you have been awarded a significant sum, say over £50,000, we would recommend that you see an Independent Financial Adviser (IFA) to see how you can make your money work best for you. We can recommend an IFA to you. Please note that we do not have any formal relationship with any IFA and we will not receive any payment for the introduction.
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