How Do I Settle an Injury Case for My Child?

Sadly kids get hurt in accidents just as frequently as adults do and there is an entire body of law dedicated to dealing with how these claims are handled. The laws are designed to prevent parents from intentionally or negligently spending compensation for the child’s injuries before the child is 18 years old.  So how does it work when your child is injured and you want to settle the claim, either with or without an Atlanta child injury lawyer? Be aware that the Georgia Legislature amended the dollar amounts in OCGA 29-3-1.

Settlements are Contracts

First, understand that any settlement for an injury case is a contract. The injured party is contracting to give up their rights to further compensation in exchange for a set amount of compensation. These deals cannot be reneged on. Since we all know from the Jim Carey movie, “Liar, Liar” that minors under the age of 18 can void out any contract when they reach 18, insurance companies know they cannot enter into settlement agreements with minors without court approval. See O.C.G.A. § 13-3-20; Holland v. Peerless Furniture Co., 60 Ga. App. 149 (1939)

The second key thing to know is that parents are legally liable for any medical bills that their children incur. That means the parents actually “own” or control the medical bill compensation portion of the claim. This leads to a confusing result when it comes to the statute of limitations.

Statute of Limitations

Because the parents have the claim for the child’s medical bills, the statute of limitations on that part of the claim is the standard 2 years for personal injury so most parents will want to file suit or resolve the claim before that 2 year anniversary. The chid’s own claim for pain and suffering or scarring runs when they turn 20; that’s age 18 plus the two-year statute of limitations.

So, How Do I Settle My Kid’s Injury Case?

If the value of the settlement is below a particular threshold, it’s easy and you don’t need to get the court involved. See O.C.G.A §29-3-1 et seq. Here is what the law says specifically:

“However, when the total value of all personal property of the minor is $25,000.00 or less, the natural guardian may receive, hold and use all or part of the personal property for the benefit of the minor without being legally qualified as a conservator to that personal property.”

In other words, if the settlement is less than $25,000, you can settle the case without being appointed the legally qualified conservator of the child’s case. If the gross total of the settlement is more than $25,000 some of the settlement can be allocated to loss of services of the minor and paid directly to the parents. This can then reduce the minor’s takedown below the $25,000 threshold, meaning the courts don’t have to get involved. The parents should not take more than the child in such a situation.

When Court Approval & Conservator Are Required (Thresholds)

Under O.C.G.A. § 29-3-3, after the 2022 amendment (HB 620), the rules are:

• If Gross ≤ $25,000: The “natural guardian” (usually a parent) or “next friend” may compromise/settle the claim without court approval and without needing to become conservator.

• If Gross > $25,000 but Net ≤ $25,000: Court approval required, but no conservator needed. The natural guardian or next friend may receive payment (assuming no conservator is in place), but must use it for the minor’s benefit and be accountable.

• If Gross > $25,000 and Net > $25,000: Conservator required; settlement must be approved by the appropriate court; the conservator must receive the settlement and hold/use it for the minor under court oversight.

These changes increased the threshold from $15,000 to $25,000 in 2022.

What Courts Handle Approval & When

Which court must approve depends on whether a lawsuit (“legal action”) has been filed or not:

• If no lawsuit has been filed (pre-litigation), then the petition to compromise the claim is filed in probate court of the county where the minor lives. Justia+2swiftcurrie.com+2

• If a legal action has already been filed (litigation in superior, state, or other court), then the settlement must be submitted to the court in which the action is pending. Justia+2swiftcurrie.com+2

The court will evaluate whether the proposed settlement is in the best interest of the minor. The court may require a hearing, but doesn’t always — if the record clearly shows all requirements are met, the court can approve without a hearing

What if the Settlement is more than $25,000?

If the settlement for the minor is more than $25,000 you will have to get the court’s permission to settle even if the child only gets less than $25,000 in pocket after attorneys fees and medical reimbursement.  O.C.G.A. § 29-3-3. If the case is not already in litigation, then you need to file in the probate court for the County where the child lives.

If the child will net over $25,000, the issue of a conservator can be avoided by establishing an annuity that reduces the take-home amount to below $25,000 and then no conservatorship is needed.

What if the Child will Net More than $25,000?

Then a court-appointed conservator is required. This means you are filing two documents; 1) permission to settle the case and 2) appointment as conservator to protect the money for the child’s benefit. O.C.G.A. § 29-3-39(g)

The conservator must set aside the money in a separate bank account and produce yearly reports. The court will also require a bond on these parents and that can be hard if their credit is no good. It’s a good idea to pay a lawyer for an hour of their time to go over all the options even if you are not going to hire one to handle the injury claim in general.