When Children Have a Personal Injury Claim
Children have the same rights as adults with respect to personal injury claims arising from the negligence of others.
In Most states the law is that persons under the age of eighteen (18) years do not have the legal capacity to enter into contracts. Likewise, individuals under the age of eighteen (18) do not have the capacity to settle their own personal injury claims.
In order for a minor (anyone under the age of eighteen (18) years) to file a claim in Court, the claim must be filed through a Guardian Ad Litem. The Guardian Ad Litem, usually one of the minor’s parents, will file suit as the minor’s Guardian Ad Litem.
All settlements of a minor’s personal injury claim must be approved by a Judge in order for the settlement to be valid. If the Judge does not approve of a minor’s settlement, the minor, when he or she becomes eighteen (18) years of age could then disavow the settlement and file the claim a new even though payment has been made on the child’s claim.
Even if settlement is tentatively made in a child’s personal injury case before suit is filed, judicial approval of the settlement is still required. As a result, even after the parties have agreed to the terms of the settlement, a “friendly” lawsuit must be filed in order to have a Court file for which the Court will hear and determine the issue of whether the settlement is fair to the minor.
In a hearing on the issue of the Court approval of a minor’s settlement, the Court will hear and consider medical evidence, usually in the form of written medical records, and consider the amount of medical bills and the degree and extent of any permanent injury. Based upon this evidence, the Court will consider whether the settlement in the amount proposed is fair to the child. In most cases in which a child, through his or her Guardian Ad Litem, is represented by an attorney, the Court will approve the settlement. However, the Court has the power and authority to disapprove of a settlement even when the child is represented by an attorney. If the Court does not approve of the settlement, the case must be tried.
The proceeds of the settlement, after litigation expenses, is paid into the Clerk of Superior Court for the use and benefit of the child. These funds will be invested by the Court and will draw interest, although usually not at a very high interest rate. When the minor becomes eighteen (18) years of age the Clerk’s office will then disburse all of the funds, including the accrued interest to the child.
A question which frequently arises is whether the parents may use the funds from the minor settlement for the benefit of the child. The answer is almost always no. Petition can be made to the Clerk of Court for authority to release some of the proceeds. However, in actual practice, it is very rare that the Court will authorize the release of these funds to the parents. The purpose of the law is to protect the interest of the child and there is a very strong public policy to preserve these funds for the benefit of the minor.
Although it is the law that all minor settlements must be approved by the Court, in very small cases, the insurance company will sometimes issue the check directly to the parent for the benefit of the minor child. In doing so, the insurance company is taking some risk. However, when there is a small amount of money involved, it is usually more feasible economically for the insurance company to take a chance and release the funds to the parents rather than hire a lawyer to handle the minor’s settlement. Usually however, if the payment for the child’s case is in excess of $2,000, the insurance company will insist, as it should, upon judicial approval.
With respect to medical bills, this claim may be made either by the minor or by the minor’s parent who is, ultimately responsible for the medical expenses. This election will be made by the Guardian Ad Litem at the time suit is filed.
As with all personal injury cases, the proceeds from the recovery from the personal injury claim are tax free.