Tuesday, March 23, 2010

Minor Settlements

By John DiMotto
In Wisconsin, pursuant to section 807.10 of the Wisconsin Statutes, whenever a settlement or compromise is entered into involving a minor, it must have the approval of the court. The approval can be within the context of a civil lawsuit, or it may be sought in a separate "minor settlement" proceeding brought by a court appointed guardian or by a guardian ad litem for the minor. We usually see these matters in situations where a child is injured in an automobile accident and insurance company who is paying the claim wants court approval and release from further liability.
In the context of a minor settlement case, there are numerous considerations that demand a judges attention:
1) Judges routinely require that they be provided with reports regarding the incident (ie an accident report) so they can determine whether the child bears any fault/liability for the incident.
2) Judges routinely require that they be provided with medical records that document the injuries sustained by the child so they can assess the value of the injury.
3) Judges want to be satisfied that the settlement is fair to the child since this will be the only opportunity for the child to be compensated.
4) Judges determine the appropriate compensation for the guardian ad litem. Usually the GAL is the attorney for the family of the child. Judges in Milwaukee County routinely cap GAL fees to no more than 25% of the settlement.
5) Judge require the the settlement be placed in an annuity, if the settlement amount is great, or in a restricted bank account. The money may not be accessed until the child is 18 years of age or unless a specific order of the court for early withdrawals is obtained.
6) Judges are very sensitive to making sure the family of the child understand that the settlement money is the child's money and not family money. It is not to be used by the parents to support the child - that is the responsibility of the parents.
The requirement for court approval is a way for society to ensure that compensation is just and that the best interest of the child is at the forefront of the proceedings.
In my next few blogs, I will address the various types of civil actions that come through the doors of the courthouse for judicial/jury resolution.

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