QUESTION: Approximately nine months ago, our 8-year-old son was injured in a traffic collision while riding as a rear-seat passenger in a carpool vehicle with some other children. My wife and I have been trying to resolve the matter with the at-fault party’s insurance company without hiring an attorney. The insurance company has offered $10,000 to settle our son’s claim, which seems reasonable; however, we have been told that the money cannot be paid until the settlement is approved by a judge and arrangements have been made to put the money into a "special account" until our son reaches age 18. Is this correct?

ANSWER: The rules governing compromise by a parent or guardian of a minor’s disputed personal injury claim are governed by Probate Code §3500 and Code of Civil Procedure §372. In general, these statutes provide that the parent of an injured minor can give a valid release of the minor’s personal injury claim only where the payment of the settlement has been pre-approved by the filing of a petition for approval of the settlement and court hearing before a Superior Court Judge. The insurance company for the at-fault driver is most likely unwilling to pay the settlement proceeds to you absent court approval. The failure to obtain judicial approval could potentially expose the company or its insured to another claim by your minor son at a later date.

In order to obtain a judicial approval of the settlement that will meet statutory requirements and be satisfactory to the at-fault driver’s insurance company, you will need to file a petition with the probate court in your county of residence. While this type of petition is fairly routine for law firms that regularly practice in the area of personal injury and tort litigation, this paperwork can be extremely daunting to a layperson not familiar with probate court policies, procedures and proof requirements. Among other things, a petition for approval of a minor’s claim must give proper legal notice and set forth an explanation as to why the settlement is reasonable, considering the injuries, incurred medical expenses, and likely future medical expenses. The probate judge will also want to know whether your son has any residual injury or if he has fully recovered. The petition must also account for how the money will be held on deposit or in trust until your son becomes an emancipated adult at age 18. In most cases, the court will hold a hearing to assure that these issues have been considered.

If your petition is approved, the court will mandate that the money either be placed into a blocked savings account at a federally insured bank or a specific type of single premium deferred annuity contract through an approved insurance company. The court will also require proof that all doctors and other lienholders will be paid from the settlement proceeds.

Before finalizing the settlement of your son’s injury claim, it is my recommendation that you consult with an attorney knowledgeable in this area of the law. Advice from an experienced attorney can assist you in the preparation and filing of the necessary paperwork for approval of the settlement and give you a valuable second opinion as to whether the amount of compensation offered is reasonable, given your son’s injuries, medical expenses, and future medical needs, if any. The probate clerks at our local court are generally quite helpful, but they are not allowed to give legal advice or counsel regarding the preparation of court documents and petitions.

Jeffrey D. Stulberg, A Law Corporation, offers a free initial consultation on all civil and criminal matters.  Contact our office today to schedule an appointment.