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The Special Rules of Personal Injury Claims for Children

October 5, 2022 Personal Injury

When an adult is hurt by another person’s negligence, the settlement process is fairly simple. The injured person signs a settlement agreement and the insurance company pays. But it’s not so simple when the injured person is a child. A personal injury claim for a child has special rules.

Court Approval is Necessary

In Alabama, and in most states, a settlement for a child must be approved by a judge. Once a parent decides to settle the child’s personal injury claim, then the parent (or their attorney) must notify the court system that a settlement has been reached.  Then the parent’s attorney or the insurance company’s attorney must file a motion requesting a “pro ami” hearing.

What is a “Pro Ami” Hearing?

A pro ami hearing is before a judge in a courtroom.  The parent, the injured child, and their attorney must appear in court. The judge’s job in a pro ami hearing is to determine whether the proposed settlement is in the best interest of the child. The personal injury claim is only truly settled if the judge approves the settlement as being in the best interest of the child.

The Role of the Guardian Ad Litem

Judges frequently appoint a “guardian ad litem” to review the evidence, meet with the child, and meet with the parents.  The guardian ad litem is an attorney whose sole job is to protect the interests of the child. The guardian ad litem will then give his or her recommendation to the judge as to whether the settlement is in the best interest of the child.

What Happens to the Settlement Money?

Children cannot receive money directly.  Therefore, there are a few options available to the parents, but one or more of these options must be approved at the pro ami hearing.

1) Court Account – The settlement money can be held in an interest-bearing account by the court clerk’s office until the child reaches the age of majority.  In Alabama, this is the age of 19. When the child turns 19, he or she can pick up the check from the clerk’s office.

2) Structured Annuity – The settlement money can be placed into a structured annuity.  There are several benefits of this, including a higher interest rate of growth and it gives the parents ability to control when the child receives the money.  Many parents decide on an annuity that delays payment to the child until they are at a more mature age such as 25.

3) Conservatorship – Another option is a conservatorship.  Some or all of the settlement money can be placed into a conservatorship.  A conservator is a court-appointed person who has the legal authority to control the money of someone who is incapable of doing so, such as a child.

Can the Parents Get Any of the Settlement Money?

In Alabama, parents can request the judge to approve up to $5,000 to be made payable to the parent(s) under Code Section 26-2A-6. The money must be used for the benefit of the child.  The judge is not required to give $5,000 to the parents, it is completely up to the judge’s discretion.

Questions About Personal Injury Settlements for Your Child?

We handle claims for the parents of injured children.  If we can be of assistance, please schedule a free consultation.