Personal Injury Lawyers in Houston TX | O'Hara Law Firm

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What to Expect When Settling Your Child’s Claim in Houston TX

A parent with an injured child as a result of someone else’s negligence likely has many questions and concerns.  Will he fully recover from his injuries?  Will she have any permanent scars?  Will my child have any long-term issues or problems?  How will I pay for all the medical treatment?  After the dust settles, a parent eventually may have questions regarding settling the child’s claim with the wrongdoer’s insurance provider.  This article will discuss common issues relating to resolving a minor’s claim. 

A minor cannot bring a claim on his or her own.  A parent or guardian must represent the child to resolve the child’s claim.  The adult must represent the child for his or her claims for pain and suffering, impairment, disfigurement and mental anguish.  The child and parent may both have claims against the at-fault party.  Whenever the child receives medical treatment for injuries in a car accident, dog bite, slip and fall, etc., the parent has a claim for reimbursement of the medical expenses.  The parent is responsible for paying the medical bills, not the child.  Thus, the parent has a claim for the child’s medical bills.  The parent may also have a claim for mental anguish in some circumstances. 

When the child suffers an insignificant or minor injury, the settlement amount is often low.  Most insurance companies will pay settlement amount of $5,000 or less directly to the parent in exchange for the parent signing a release of the child’s claims.  The insurance company is not worried about the child attempting to overturn the settlement when he or she reaches the age of majority because the injuries are de minimis.  The parent should save the settlement funds to give to the child when he or she reaches eighteen (if the parent’s medical bills claim is grouped with the child’s claim, the parent may reimburse himself or herself for medical expenses).  Most insurance companies require court approval of a settlement for a minor’s claims when the settlement amount is over $5,000.   

Guardian Ad Litem Hearing 

When a child’s settlement is over $5,000, most insurance companies seek court approval of the settlement.  The insurance company’s lawyer will file a “friendly suit” against the at-fault party on behalf of the parents and child.  The insurance lawyer will also file an Answer to the lawsuit on behalf of the at-fault party.  Then, the attorney will request the judge to appoint a guardian ad litem.  The guardian ad litem is an attorney who represents the interests of the child.  The guardian ad litem acts as an investigator for the court to determine what is in the best interest of the child.  The parents sometimes have conflicting interests with the child.  The guardian ad litem acts as an independent person to make sure the settlement is in the best interests of the child.   

The guardian ad litem will typically perform several tasks as part of the investigation.  The guardian ad litem will review the settlement agreement, proposed allocation of settlement funds, petition, medical records, medical bills, pictures of the injury, proposed investments of the settlement funds and any other relevant documents.  Next, the guardian ad litem will interview the parents and possibly the child regarding the child’s past and current condition.  The interview may be in person or over the phone.  If the child has alleged disfigurement and the interview is not in person, the guardian ad litem usually requests current photographs of the disfigurement. Last, if there is an attorney representing the child and parents, the guardian ad litem might ask questions of the attorney for any needed clarification of any outstanding questions or issues.  

After the guardian ad litem feels fully informed about the settlement and relevant facts, he or she will request a hearing with the court.  The guardian ad litem, defense attorney, parent(s) and plaintiffs’ attorney will attend the hearing.  Sometimes, the child attends the hearing as well depending on the circumstances and judge’s procedure. The guardian ad litem will inform the judge if he or she believes the settlement is in the best interest of the child and answer any questions the judge might have.  Then, defense counsel typically questions a parent to confirm that he or she understands that the settlement is final and will not proceed to a trial.  The judge will then decide whether to approve or reject the settlement.  It is rare that a judge rejects the settlement if a guardian ad litem recommends the settlement.   

Settlement Funds 

After the court approves the settlement, the judge signs an order approving the settlement terms.  The judge will direct the insurance company or defendant to deposit the minor’s portion of the settlement into a court registry or annuity.  The larger the sum, the more likely the minor’s settlement portion is invested in an annuity.  There are two reasons why an annuity is chosen over a court registry for larger sums.   

First, an annuity typically pays a higher rate of return than the court registry even after fees when the amount is not small.  Second, an annuity will typically have a payout over a set period of time instead of releasing all the funds at once at the age of eighteen.  Most 18-year-olds are not mature enough to handle a large sum of money wisely.  A court registry will release all of the funds to the minor as soon as he or she turns eighteen if he or she wants.  An annuity can pay portions out over four years during college or even over a period of fifteen or twenty years after the eighteenth birthday.  This allows the young adult to mature before receiving a large sum.  

O’Hara Law Firm Represents Injured Children 

The O’Hara Law Firm routinely represents injured children.  If you have an injured child, contact the O’Hara Law Firm for a free consultation. Guardian ad litems often tell us that our settlements obtained for our children clients are not just good, but “outstanding” or “great.”