Settling personal injury claims for minors (or anyone with a legal incapacity)
Children under 18 can claim compensation for personal injury. However the child cannot bring the claim themselves. The claim must be started by their “litigation guardian”. This is usually a parent or guardian.
What is legal capacity?
Legal capacity means that you have the ability to make legally binding decisions. It means that 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. 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.
If there is uncertainty about whether an injured person has legal capacity, medical evidence is often obtained to clarify the issue.
Settlement of a personal injury claim for a legally incapacitated person
There are specific guidelines in place to ensure that 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 the settlement has the sanction of a Court or the Public Trustee. 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 for the sanction fees?
The insurance company is responsible for 100% 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, 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 their 18th birthday, if there are compelling reasons to do so. For example, this might be for the cost of meeting education or medical treatment needs.
Settlement of personal injury claims involving people who do not have legal capacity is complex and complicated. It is important that you have an experienced personal injury lawyer guiding you through this process.
If you or any member of your family needs advice on a personal injury claim, contact GC Law on 1300 302 318 or you can visit our Free Claim Review page.