In Ontario, the settlement of personal injury claims involving minors (under age 18) require an additional step that isn’t required in the claims of adults.
That additional step is Court approval.
Court approval is a process where a Judge reviews a proposed settlement of a minor’s claim and approves the settlement if he/she believes it is fair, reasonable and, ultimately, in the best interest of the minor. A settlement even if agreed upon by the minor, his or her parents or guardians and their lawyer is not binding unless or until approved by a Judge.
A Judge reviewing a proposed settlement will look at the reasonableness of 3 things:
- The proposed settlement;
- The legal costs;
- The proposed use or investment of the settlement funds.
The default use or investment of settlement funds for minors is to pay the money into the court trust account where it is held until the minor turns 18 at which time the money plus any interest is paid to the now adult plaintiff.
Settlements of $35,000 or less can be paid to the minor’s custodial parent if the Judge is satisfied, they will use or invest the funds appropriately for the benefit of their child.
These options work for modest settlement amounts where the money can be used to fund any post-secondary education costs or assist in the child’s transition to adulthood.
The payment into Court default option is not typically used for larger settlement amounts due to the obvious concerns of providing an 18-year-old person with a significant amount of money in one lump sum.
In cases involving larger settlement amounts the money is usually used to purchase what is called a structured settlement or annuity.
Instead of one lump sum payment at age 18, a structured settlement provides for a series of smaller instalments over a period of time.
This protects the plaintiff from over spending the settlement funds when he/she is young and ensures at least some of the settlement funds are available throughout their lifetime.
There are many other strategic advantages to structured settlements which make them the best option for the settlement of a claim involving an injured minor.
These advantages are discussed here.
The additional step of Court approval of a personal injury claim that involves a minor requires an experienced lawyer who can not only negotiate a fair/reasonable settlement but can also provide guidance on the best investment options that will satisfy a Judge.
At Beckett Personal Injury Lawyers, we have handled hundreds of claims for injured minors and have the knowledge, experience and the expertise needed to handle such claims.
