Under Wisconsin law settlements for a minor may not be enforced without the appointment of a guardian ad litem and the approval of the court. Supreme Court Justice Gordon put it best when he said “we are aware that settlements are sometimes made in cases involving the claims of minors wherein releases are taken from the parent, but court approval is not sought. This practice is ordinarily found only in cases in which the injuries are modest and the settlement is correspondingly small. Since it is clear that a minor cannot be bound by an extra judicial settlement, a calculated risk is taken in striking a bargain without the benefit of judicial approval.” In re: Matter of Lee O. Anderson, minor, et al. v. Mutual Service Casualty Insurance, 17 Wis.2d 380, 382, 117 N.W.2d 360, 361 (1962). In Anderson a minor child was represented by an attorney at a summit hearing at which a settlement was approved in the Circuit Court of Douglas County. The minor settlement took place without there having been a guardian ad litem appointed. The Supreme Court held that even though an attorney had represented the minor, the settlement was not valid because a guardian ad litem had not been appointed for the benefit of the child. The court went on to say that “the legislature has wisely directed a guardian ad litem be appointed for a minor who does not have a general guardian. This is a desirable way of assuring that in every case the infant’s rights will be fully protected.” See Id. The logic behind the legislature’s actions is strongly in favor of protecting a minor.
The most common types of minor settlements are for child personal injury claims involving motor vehicle accident or dog bite case where a minor was injured and the insurance company asks for a minor settlement hearing. Because it is the insurance company’s neck that is on the line, it is their prerogative to ask for a minor settlement hearing. Again, they assume the risk set forth in Anderson.
When a settlement for a minor has been reached and the insurance company requires the settlement to be approved by a circuit court the ball is usually in the attorney’s court to get the settlement approved. It is important to ask the insurance company to pay for the filing fee for the petition for approval. These fees change from county to county but they are usually approximately $155.00. The documents filed with the court are pretty standard. If you don’t have copies of these documents, please feel free to contact me and I will e-mail them to you. My standard letter to the Clerk of Circuit Courts in the county where the injury occurred encloses an original (1) Petition for Approval of Minor Settlement, (2) Affidavit from the attorney in support of the Petition, and (3) an original and a copy of an Order for Approval of the Minor Settlement. I always ask the clerk to contact me if a settlement hearing is not necessary. Sometimes the court will review the petition, pictures, medical records and bills or any other documents attached and sign the Order and forward it back. That’s why it’s important to ask to avoid the extra expense of court time. Be sure to call the court about a week after sending the documents just to make sure that the court understands the matter and to explain why you think the matter needs to have a hearing or whether you would like the court to read the documents and approve it without a hearing. If the court requires a hearing, then it is very important to have the client present along with the client’s parents or legal guardian. When it comes to people present at the hearing, the more the merrier. If father and mother are divorced and both have custody of the child I strongly encourage both parents to attend the hearing. The last thing we need is a battle after the fact if only one parent came. Also, you don’t want that embarrassing question from the judge about why only one parent is in attendance. If because of work or other conflict only one parent can attend, it is a good idea to get a written consent by the absent parent and bring that with you so the court is aware that the other parent has read through the documents and consents to the approval of the minor settlement.
Minor settlement hearings themselves don’t change much injury to injury. Hopefully the judge you are appearing before will have enough time on his or her calendar to make the child feel at home. I have had judges allow the child to play with the gavel and ask questions of anyone on the judge’s staff. Court reporters seem to get the most questions.
The purpose behind a hearing is to make sure that everyone is aware of the ramifications of the settlement. Evidence needs to be presented so that the court is aware of the extent of the injuries. That is why it is important to forward to the court in advance of the hearing documents that substantiate the injury. A motor vehicle accident report, pictures, medical bills, and records are a good start. I usually send everything that I sent as a demand to the insurance company to the judge in advance of the hearing. Be sure to prepare the minor client for a few questions about how the accident happened, his or her past injuries and present injuries, and how the injuries affected their life since the accident.
Next, one should ask questions of the parents or legal guardians of the child who are present. Again, if someone cannot attend, it is important to have an Affidavit to present to the court to show the court that everyone is in agreement about the settlement. The parents/legal guardians need to set forth that they understand that a settlement has been reached regarding a certain injury. They need to state that they understand that this settlement is full and final. For example, “do you understand that this is a full and final settlement for all of the injuries that your child has suffered on the injury date and he/she can never again claim compensation for those injuries?” They must state that they are aware and approve that the funds will be placed in a “secure” bank account until the minor reaches the age of 18 or older. Recently I have heard of judges being very concerned about the type of account that a minor’s funds are placed. I am not going to tell you where to place your client’s funds other than be sure to place them in an insured interest bearing account. Again, structured settlement companies like the ones that advertise in The Verdict are highly recommended.
For your sake and for the sake of your client it is important to confirm on the record that the parent/legal guardians understand that they will not have access to the funds. It’s often a good idea to make them aware that they will only be able to get access to those funds if they petition the court at a later date for certain things. At this point you can use the court to tell the parents/legal guardians about what things they can ask for. Judges will usually be helpful in this matter by stating that it is only for extreme situations that they will release funds for the benefit of a minor prior to that minor’s 18th birthday. Asking for a new pair of socks or a new keyboard for a computer (these are things that I have heard clients ask judges and me about) will most likely not be allowed prior to that child’s 18th birthday.
For your benefit and the benefit of your minor client, it is important to ask the parents about every item on your settlement disbursement form. Be sure to have copies for everyone present and go through it with them line by line asking them if they understand and agree with the settlement disbursement form. For example, “Do you realize that the settlement amount is $15,000.00? Do you consider this to be a fair and reasonable settlement for the injuries your child sustained? Do you know that our firm’s fees are this amount and the costs are this amount? And do you feel that the fees and costs are fair and reasonable?”
In the end a minor settlement hearing is the government’s way of insuring that minors are not taken advantage of. It also has the ancillary benefit of making sure that minors or their parents are fully aware of the settlement and in that matter protects trial lawyers who represent these victims. Finally, don’t forget to do your duty as guardian ad litem. You must state to the court that you approve the settlement for the minor based upon the documents presented and testimony given. For more information of child settlements, visit our Q&A page.