So many times we hear about personal injury settlements involving adults. As a Dallas/Fort Worth area personal injury lawyer, I have handled many cases for minor children. But how are injury settlement for minors handled? Is the minor’s settlement protected?
The Minor’s Case is Divided into Two Parts.
1. The first part is the claims of the parent or legal guardians. Under Texas law, a parent has the legal duty to provide for health and medical care of their child. If the child is injured in an accident, then the medical expenses related to the treatment of the child are the responsibility of the child’s parents. Therefore, any medical expenses incurred by the parents for the treatment of the child is a claim that belongs to the parents. As such, the parents have the legal right to seek reimbursement of the medical bills from the person responsible for causing the injury to the child and to bring suit for those damages.
2. The second part of the minor’s claims are those that involve the actual physical injury and any effects of the injury. Examples would include pain and suffering, scarring, physical impairment, mental anguish, etc. These claims belong to the child and are separate from the claims of the parents. However, under Texas law, a minor lacks the legal capacity to bring a suit in their name for these damages. Therefore, the child is given two options for seeking damages. The child could wait until reaching the age of eighteen (18) and bring suit at that time. Or, the parent can bring the suit on the child’s behalf in their representative capacity as the child’s parents.
This is why you normally see injury lawsuits involving children styled as follows: John Doe, Individually, and as Next Friend of Baby Doe, a minor child. The “Individually” part includes the claims of the parent, John Doe. The “Next Friend” part includes the claims of the child, Baby Doe, which being brought by the parent as a legal representative of the child.
Personal Injury Settlements Are Not Binding on Minors.
Another concept to keep remember with minors is that a personal injury settlement for a minor is not binding against the minor. That is because a minor child lack the legal capacity to enter into a contract. Additionally, the parent lacks the standing to enter into a binding settlement for the minor’s claims. Even if a parent settle an injury claim on behalf of their minor child, then the child may re-assert the claim after becoming an adult.
How Does a Minor’s Case Get Settled?
You might be asking: Then how does a minor’s case get settled? The answer is simple: Get court approval of the settlement. This is called a “Friendly Suit” and here’s how it works.
It would be unfair to make a child wait until turning eighteen to assert their claims since evidence may be lost or destroyed and witnesses memories may fade. At the same time, it would be unfair for a potential defendant to have to wait until the child turns eighteen to see if he is going to be sued by the child. Therefore, a defendant may settle a claim with a minor child through a Friendly Suit.
A Friendly Suit is a lawsuit brought by the parties as a necessary formality in finalizing a settlement involving a minor. If the defendant wants to be protected against being sued after a settlement when the child turns eighteen, the defendant may insist that the settlement be approved by the court. Therefore, the parties file a “friendly suit.”
It is not mandatory to have a friendly suit. However, without court approval of the settlement, a child may bring suit against the defendant after reaching adulthood. Since a friendly suit costs money, many insurance companies are willing tot settle without a friendly suit if the injuries are relatively minor and the settlement is relatively small.
But where the injuries are more severe and the settlement amount is fairly significant, the defendant or insurance company may elect to get the protections of a friendly suit before paying the settlement.
Here’s How a Friendly Suit Works….
Once the parties have reached an agreement to settle the minor child’s claim, the insurance company refers the case to their attorney who prepares the court papers for a friendly suit. Once the friendly suit is filed, the judge then appoints an independent “guardian ad-litem,” sometimes known as an “attorney ad-litem.”
This person is an attorney appointed by the judge to investigate and review the settlement to determine whether it is in the “best interests” of the child. The reason an ad-litem is appointed is to make sure the minor’s interests are being objectively protected by someone who has no conflict of interest in the case.
Once the ad-litem concludes the investigation, there will be a short hearing where the terms of the settlement are given to the court. The ad-litem will then recommend to the court whether the settlement is in he best interest of the child and whether the settlement should be approved. Unless there is anything out of the ordinary, the ad-litem and the court will normally approve the settlement after the hearing.
Where Does the Money Go?
The court and ad-litem will normally recommend that the settlement proceeds for the minor child be deposited and held in the court’s registry until the child turns eighteen (18) years old. This is because the money for the minor must be set aside to compensate the child. Sometimes, the parties will agree to have the proceeds placed into a private annuity where the funds might gain a higher rate of interest. Nevertheless, the funds are to be placed into such a fund for the child to enjoy after reaching eighteen.
Sometimes I get asked whether the money can be released to the parents before the child turns eighteen. Only the court can approve such a request and it is highly unlikely that the court will allow this. It is of utmost importance that the money is preserved for the benefit of the child.
Once the settlement is approved by the court, then the settlement becomes binding against the minor child. Likewise, the child cannot reassert any claims after reaching adulthood.