If a child is injured as a result of another person’s negligence, compensation can be a complicated endeavor. Minors, unlike adults, lack the capacity to enter into contracts or settle monies on their own. For the child’s protection, settlements with minors must be presented to and approved by the court in what is commonly referred to as the compromise of a minor’s claim.
This process is in place to ensure that the resulting settlement is reasonable, sufficient, and effectively overseen until adulthood. Regardless of whether the injury results from an automobile accident, medical negligence, a faulty product, or a slip-and-fall, the court’s involvement is important in protecting the child’s future financially.
Legal Requirements for Settling a Minor’s Claim
Because minors cannot legally negotiate or accept settlements, specific legal safeguards exist to ensure they receive fair compensation. The key requirements include:
1. Court Approval of the Settlement
Unlike personal injury settlements for adults, any settlement involving a minor must be reviewed and approved by a judge. This requirement prevents parents or guardians from accepting an unfair settlement that does not fully cover the child’s damages or future needs.
2. Guardian Ad Litem Representation
In many cases, courts appoint a guardian ad litem—a neutral third party who represents the minor’s best interests. This guardian reviews the settlement, ensures that legal fees and medical expenses are fair, and advocates for the child’s financial security.
3. Structured Settlements vs. Lump-Sum Payments
To prevent misuse of the funds, settlements for minors are often structured rather than paid in a single lump sum. A structured settlement provides periodic payments that may continue into adulthood, ensuring long-term financial security. Courts may approve lump-sum payments if they are placed in a blocked account that cannot be accessed without court approval until the minor turns 18.
4. Parental and Attorney Involvement
Parents or legal guardians play a crucial role in negotiating the settlement, but the court ensures that the final decision prioritizes the child’s well-being over any other interests. Additionally, any attorney fees deducted from the settlement must be reasonable and court-approved.
What the Court Considers When Approving a Minor’s Settlement
Before granting approval, the court evaluates several factors to determine whether the settlement is just and beneficial for the child:
- Extent of the Injuries – The court reviews medical reports, future medical needs, and any lasting effects of the injury.
- Fairness of the Settlement Amount – Judges ensure that the compensation is appropriate based on the damages suffered.
- Financial Management of the Funds – Courts assess whether the funds will be placed in a blocked account or structured settlement to protect the child’s financial future.
- Parental Consent and Interests – While parents have input, the court ensures that the decision is made with the child’s best interests in mind.
- Legal Fees and Deductions – The court carefully reviews attorney fees, medical liens, and any deductions from the settlement.
Types of Cases That Require Court Approval for a Minor’s Settlement
Minors may suffer injuries in various situations, and when seeking compensation, court approval is often required in cases such as:
- Car Accidents – Whether the child was a passenger, pedestrian, or bicyclist, settlements for auto-related injuries must be reviewed.
- Medical Malpractice – When a child is injured due to a doctor’s negligence, ensuring fair compensation is critical for long-term medical care.
- Defective Products – Injuries caused by unsafe toys, electronics, or other consumer products often result in settlements that require court oversight.
- Slip and Fall Accidents – When property owners fail to maintain safe conditions, resulting in a child’s injury, a court must review the settlement.
- Dog Bites and Animal Attacks – Settlements involving serious injuries from animal attacks often require court approval to protect the minor’s financial future.
Benefits of a Court-Approved Settlement for a Minor
While the approval process may add time to the settlement process, it provides essential protections for the child, including:
- Ensuring a Fair and Just Settlement – Courts prevent lowball offers from insurance companies that may not fully cover the child’s current and future needs.
- Protecting the Child’s Financial Future – Structured settlements or blocked accounts safeguard the funds until the child reaches adulthood.
- Preventing Mismanagement of Funds – Parents, guardians, or others cannot access the money for personal use without court approval.
Legal Safeguards Against Exploitation – The involvement of a judge and guardian ad litem reduces the risk of financial exploitation or coercion.
Challenges in Settling a Minor’s Injury Claim
Despite the protections provided by the court, there are challenges in the process:
1. Delays in Settlement Approval
The court approval process can take weeks or even months, especially if a guardian ad litem is required. This can delay access to funds needed for medical care.
2. Disagreements Over Compensation
Insurance companies, attorneys, and parents may have conflicting opinions on how much compensation is fair for the minor’s injuries.
3. Restrictions on Fund Usage
Parents or guardians may not be able to access the settlement money for immediate expenses without court approval, which can create financial strain.
4. Complexity in Structured Settlements
Setting up a structured settlement can be complex, and some parents may prefer a lump sum that is more accessible. However, courts generally favor structured payments to ensure long-term financial stability for the minor.
What Happens to the Settlement Funds?
Once a settlement is approved, the funds are typically handled in one of three ways:
- Blocked Accounts – The settlement money is placed in a bank account that cannot be accessed until the child turns 18.
- Structured Settlements – Payments are made periodically (e.g., monthly, annually) rather than in a lump sum.
- Special Needs Trusts – If the child has long-term medical needs, the settlement funds may be placed in a trust designed to cover future healthcare costs.
Steps to Take When Pursuing a Minor’s Injury Settlement
If your child has been injured and you are seeking a settlement, consider the following steps:
- Hire an Experienced Attorney – An attorney specializing in personal injury and minor settlements can guide you through the legal process.
- Gather Strong Evidence – Medical records, witness statements, and expert testimonies can strengthen your claim.
- Understand the Court Approval Process – Be prepared for a thorough review of the settlement terms by a judge.
- Consider Financial Planning – Work with financial experts to determine whether a structured settlement is the best option for your child’s future.
About the Author
Neil Bhartia
Neil Bhartia isn’t your typical, stuffy attorney that you see on TV. While some have their sights exclusively on money and treat their clients like a number, Neil takes a personal interest in every single client he has. As an empath, Neil understands that people that seek legal help are typically in an involuntary, and stressful situation, and he goes out of his way to diffuse the stress and educate clients on each every detail of the legal process.
