Settling a personal injury claim for a minor or someone with a legal incapacity can be complicated. Start here …
Children under 18 years of age can claim compensation for personal injury, but they cannot bring the claim themselves. The child’s parent or guardian (known legally as their ‘litigation guardian’) must bring the claim.
Minors or people with legal incapacity cannot act on their own behalf.
So what is ‘legal capacity’?
Legal capacity means that you have the ability to make legally binding decisions. It means you have the capacity to understand the nature and significance of the legal decisions that you are making.
In a personal injuries claim, children under 18 years of age are not considered to have legal capacity. Adults with a mental illness, intellectual disability or a traumatic brain injury may not have legal capacity either. An adult will not have legal capacity in a personal injuries claim if they are unable to make decisions about money management, medical treatment or lifestyle.
In cases where there is uncertainty about whether or not a person has legal capacity, medical evidence will be obtained.
Settling a personal injury claim for a legally incapacitated person
There are specific guidelines for ensuring the rights of a legally incapacitated person are protected after they have been injured in an accident. The law clearly states that a settlement of a personal injuries claim for a person who does not have legal capacity cannot be a valid settlement unless a court or the Public Trustee sanctions the settlement. The test for the approval of the settlement is whether or not acceptance of the offer is for the benefit of the person under the legal incapacity.
Who pays the sanction fees?
It costs money to seek the sanction of a court or the Public Trustee. The insurance company is responsible for 100 per cent of the costs involved in obtaining the sanction, whether that is the court costs or the fees charged by the Public Trustee.
What happens to the money after the claim is settled?
After settlement of a personal injuries claim for a person with legal incapacity, the compensation is paid to either the Public Trustee or to a private trust company, for investment on behalf of the injured person. If the injured person is under 18 years of age, they are entitled to have the money paid to them once they turn 18. There are times when some of the money may be released to the injured person (or their legal guardian) before the injured person’s 18th birthday, if there are compelling reasons to do so. An example is money to meet the cost of education or medical treatment needs.
Settling a personal injury claim for a person who does not have legal capacity is complex and complicated. An experienced personal injury lawyer can guide you through this process. Call GC Law today for assistance on 1300 302 318.