Minor Children and Personal Injury Settlements

Because children do not yet have the clearer judgment of adulthood, they are often injured. Sometimes the injuries are serious, and are due to another’s negligence or reckless behavior. Thus, personal injury claims on behalf of children are common. But there are some key differences between child and adult personal injury claims. One of those differences lies in the settlement process. 

Minor children do not have the legal capacity to represent themselves in court. A child is not able to make wise decisions regarding issues such as the reasonableness of a settlement agreement. Thus, the first step in most child personal injury claims is the court appointment of a guardian ad litem to represent the child’s interests. Usually, the guardian is the child’s parent. The guardian ad litem can convey to the child’s attorney what the child seeks in terms of damages, and may speak for the child in agreeing to a settlement compromise.

Once the parties reach a settlement, the guardian ad litem files a minor’s compromise petition. If no lawsuit has been filed and no guardian ad litem appointed, the minor’s parents may file the petition. The petition includes all information relevant to the claim and the settlement, including a description of the accident and injuries, an explanation of the claim, and the amount of the settlement. 

In certain limited circumstances, the guardian ad litem can file an expedited minor’s compromise petition, which means the settlement process will be faster. The matter must be resolved within 35 days, and no hearing is required.

The minor’s compromise and release hearing is attended by the child, the attorney, and the guardian ad litem. However, if the court finds good cause for the child not to attend, then he or she will not be required to do so. At the hearing, the judge or attorney questions the guardian ad litem, making sure the settlement was reasonable and fair. The judge also ensures that the guardian ad litem understands that the settlement is final and binding.

The judge must approve all settlement agreements in a minor’s personal injury claim. Settlement agreements are voidable by the guardian ad litem until they have been approved. Thus, if the court does not approve the settlement, the guardian can reject the settlement agreement and bring another lawsuit against defendant. Alternately, when the minor reaches age 18, he or she can file a new lawsuit. 

If a settlement amount is less than $5,000, the court may order that the custodial parent can act directly on the child’s behalf. Thus, the parent can agree to a settlement and manage the settlement funds without the court’s further supervision.

Since minors do not usually have the ability to wisely manage their money, the court must provide a way to keep the money safe. Generally, settlement money goes into a blocked bank account, at an FDIC-insured bank, to which the child can have full access when he or she reaches age 18. There are also other options, including investment in an annuity, or putting the money into a trust for the child. 

Putting the settlement money away ensures that the minor gets all the money when he or she reaches adulthood, and helps the minor manage the money. However, a parent may sometimes withdraw settlement money early, as long as it directly benefits the child and is related to the injury. For example, a parent may be able to be reimbursed for health insurance copayments, deductibles, or other expenses incurred by the parent.

If your child has been injured because of another’s negligence or wrongdoing, please contact the passionate San Jose personal injury attorneys at Corsiglia, McMahon & Allard, L.L.P. for a consultation today.

• California Legistlative Information
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