Arrangement between the claimant and the defendant’s liability insurer whereby the lump sum payment for future losses is replaced by periodic payments for a fixed period or until the claimant’s death. They may be index-linked, varied or ‘structured’ during the period. The insurer uses the ‘lump sum’ to buy an annuity that funds tax-free payments to the claimant. The court has no power to order such a settlement (Damages Act 1996, s.2).