Court Approval of Minor Settlement
It is generally recognized in Wisconsin that on any personal injury settlement of more than $5,000 involving a child under 18, you must go to court and seek court approval of the settlement. There are even some lawyers and judges who take the position, that on any settlement, $5,000 or otherwise, the matter should be brought into court and approved by the judge. Assuming your child was in an accident and you must go to court to seek approval of the settlement, what can you expect? Does your child need to go with you? Will you be required to testify? What questions might you be asked? Will your child be required to say anything? What happens if the court doesn’t approve the settlement? What happens to the proceeds after settlement? Will someone from the insurance company be there? Does the hearing take place in open court or in the judge’s chamber?
Your personal injury lawyer, several days to weeks in advance, will send to the court all the appropriate paperwork on the case. This will include the accident report, medical records, medical bills and any other materials relating to how the accident happened, or the treatment of your child’s injuries. Your lawyer will advise you of the court date and where to be, presumably, weeks in advance, so you can plan around it for work and travel purposes. Yes, your child is routinely required to come to court, if age appropriate. In addition, to the medical records, bills and accident report, the injury lawyer will also send to the court a proposed court order with the breakdown of the settlement proceeds. You can expect to receive a copy of that as well, along with all papers submitted to the court, well in advance of the hearing.
Your attorney will prepare you in advance for what to expect on the day of the court hearing and what type of questions you may be asked. Most of the questions obviously focus on how the accident happened, what type of injuries your child sustained, if they made a complete recovery, if the child can do all the things that they have done in the past without any difficulty, and if you are aware of the proposed settlement and the breakdown of the proceeds, for approval by the court? You will be asked to acknowledge that the settlement if approved, is going to be a final one, and the case cannot be reopened once approved. Further, you will be asked to acknowledge that the proceeds must be placed in trust for your child and are to be turned over to the child upon their 18th birthday, and cannot be used for any other purpose without a express order of the court.
In addition to your personal injury lawyer asking some basic questions about the proposed settlement and your child’s injuries, if there is an attorney for the insurance company present, they are allowed to ask some brief questions as well. Sometimes, the judge may ask some questions if the court feels everything wasn’t covered by your own lawyer.
If your child is age appropriate, (such as not an infant or toddler under 4), more likely than not, the court will require some very brief questions from the lawyers to the child, or the judge may decide to do that on their own. Such questions will be benign in nature, so as not to be frightening in any way to the child, such as where the child goes to school, what grade are they in, what they like to do after school, what are their activities, what do they want to be when they grow up, and most importantly, that whatever injuries they sustained in the accident have resolved so the child has no lingering problems or permanent injuries.
The court hearing may take around 15 to 30 minutes on average. At the conclusion of the hearing, the court will want to hear from the injury lawyer, who many times is also acting as a court appointed guardian ad litem for the minor child, on whether the proposed settlement is in the child’s best interest and whether the attorney is asking the court to approve the settlement. It is expected that attorney’s fees be reduced to 25% of the total. Courts generally will not approve a settlement at 1/3 for fees. If the court finds the settlement in the child’s best interest, the court will make appropriate findings and approve the settlement. The court will sign an appropriate court order and you will leave that day with a copy of the signed order or within a few days of the hearing. This won’t end the process, however. You will need to make arrangements with the lawyer at some point following the court hearing to have the proceeds placed in trust. Many times this is done at a local bank where the funds remain on deposit until the child turns 18.
Sometimes I am asked by the client if they can request of the court that a certain amount of money be withheld from trust and used for expenses for the child, school costs, or to buy a laptop for the child. The answer to that question is maybe and it depends. It is completely discretionary. My experience on this issue is that if the amount requested is reasonable and limited in scope, the court will approve the request as an exception to the deposit of the funds until 18. The more greedy you might get with the request, the more likely the request will fail.
The insurance company once the settlement has been approved will send out the appropriate paperwork, release and check to conclude the case, pursuant to the court order.
If you have questions about court approval of a minor settlement, feel free to call the personal injury lawyers at Karp & Iancu, S.C. today.