One of the worst experiences you can have as a parent is when your child is injured in a car accident, dog attack, slip and fall accident, or another frightening incident. Fortunately, they may be entitled to injury compensation from the individual or business at fault.
However, special rules must be followed under California law when settling a claim or lawsuit for a minor. One is that a judge must approve the settlement before it's finalized.
Why Must You Get Court Approval for a Child Injury Settlement?
The settlement of a minor's claim is referred to as compromise of a minor claim in California. The purpose of the law requiring court approval of claims for minor children is to ensure the child's interests are protected. Here are ways that court approval protects children:
- The court reviews the facts surrounding the claim and determines whether the child is receiving an adequate amount in the settlement agreement.
- The court approves the award of attorney fees, court costs, and any other expenses—like medical bills—paid from the settlement proceeds.
- The court issues a specific order on how the minor's proceeds should be used and the type of account where they should be held.
Who's Allowed to Enter Into a Compromise of a Child's Claim in California?
Minor children—considered to be individuals under age 18—aren't allowed to enter into contracts in California. They also cannot legally settle a claim or lawsuit on their own. An adult must do this on their behalf and file a petition asking a judge to approve the settlement. The following individuals can do this:
- Either parent of the child if the parents have joint custody
- The parent who has care, custody, and or control of the child if the parents are separated
- Guardian ad litem, who is an individual appointed by the court to protect the child's interests
How to Get Court Approval of a Minor's Settlement
- No lawsuit. A parent, guardian, or guardian ad litem can file a petition for approval of compromise of a minor's claim if no lawsuit has been filed. This should be completed in the county where the child lives.
- Lawsuit. If a lawsuit was filed, the petition for court approval must be filed by the guardian ad litem in the same court handling the suit.
Is a Court Hearing Required?
The minor child and guardian ad litem must attend a compromise hearing, where the judge decides whether to approve the settlement. In making a decision, a judge considers the following:
- Settlement amount
- Type of injury the child suffered, its severity, and its long-term impact on the child's life
- Attorney fees and costs requested
- Where the settlement proceeds will be held
How Settlement Proceeds Are Handled in California
The proceeds from a minor's settlement can only be handled in certain ways allowed under California law. Here are some methods for securing and distributing the funds:
- Blocked account. This is one of the most common ways to hold a minor's settlement. The proceeds are placed in a bank account, and they cannot be withdrawn until the minor turns 18 unless there's a court order. Once they reach that age, all funds are released.
- Special needs trust. This is a long-term trust set up for a minor who needs continuing care after an incident. Funds are regularly distributed from the trust but in a way that doesn't jeopardize their ability to receive Social Security disability benefits.
- Caregiver trust. A caregiver may be able to obtain less than $20,000 for the care of the child. However, judges prefer that settlement proceeds remain in a blocked account.
- Minor settlement trust. This structure allows for more flexibility for the minor and their parents or guardian. It doesn't require court supervision.
Do you need to file a claim for your child after an auto collision, slip and fall accident, or other child injury accident? You need an experienced child injury lawyer in San Diego to fight for rightful compensation and to follow the correct procedures for approval of the settlement. Call my office to schedule a free consultation to learn how I can help.