When you and your lawyer negotiate a settlement amount for your child’s personal injury case, the hard part is over, but you are not finished. . Because the injured party is a child, the settlement money belongs to them. The court system seeks to protect the child’s interests with regard to those funds. Though most minor’s settlements would be perfectly safe in the possession of their parents, the State of New Jersey has no way of determining which families protect the money rather than spend it. Accordingly, the court system has a key role in safeguarding minor’s settlements.
Because a minor child lacks the legal capacity to sue in his or her own name, his parent or someone else will act “guardian ad litem”. If a parent is not available, or lacks the capacity or interest to bring the claim, a court may appoint a guardian ad litem, to represent the child’s interests. Whoever it is, the guardian ad litem must approve not only the sum of the final settlement, but how that money is kept on behalf of the injured child until he or she reaches majority. Typically the money is deposited with the County Surrogate’s office, as required by statute.
The child’s attorney must file a complaint with the court to initiate what is known commonly as a “friendly proceeding”. This is necessary to finalize the settlement. Typically the attorney for the insurance company will accept service for the responsible defendant. Once that occurs, the minor’s attorney must request that the court schedule a hearing date for the approval of the minor’s settlement.
The guardian ad litem must appear in court with the attorney representing the child so that the judge can review the facts of the case, the child’s injuries and the permanency of the injuries, decide whether the settlement is fair and equitable under all the circumstances, and approve all attorney’s costs and fees. Typically the attorney’s fee on a minor’s case is 25% of the amount recovered, rather than the usual one-third.
Court approval is also required for incapacitated adults. For example, a parent may have obtained legal guardianship over their adult handicapped child. In that case, the parent would be the guardian ad litem for purposes of filing the friendly proceeding to obtain settlement approval for their injured son or daughter.
Please call me at 732-214-0300 with your questions at any time. I am here to help.