Three Tips on Settlements Involving Minors in Alabama
Background: Pro Ami Lawsuits Minors get hurt sometimes by the negligence of others in car wrecks, slip and falls, trip and falls, and other personal injury claims. But they cannot enter into a contract to settle their case. S.B. v. Saint James School, 959 So. 2d 72, 96 (Ala. 2006)(“a minor is not liable on any contract he makes and that he may disaffirm the same.”)(quoting Children’s Hosp. of Birmingham, Inc. v. Kelley, 537 So.2d 917, 917 (Ala.Civ.App.1987)).
In the State of Alabama, personal injury settlements involving minors are a big deal. This is especially true considering the age of majority in Alabama is 19, unlike many other states. Settlements involving minors in Alabama have a special name: pro ami or “for friend” settlements. Technically a minor settlement is a lawsuit, but, if the parties have reached a settlement, then the lawsuit is a “friendly” one.
(1) Settlements Over $5,000.00 Require Court Approval If the settlement is over $5,000.00, then court approval in the Circuit Court is required. See generally, Alabama Code 26-2A-6; Abernathy v. Colbert County Hospital Board, 388 So.2d 1207 (Ala. 1988). More and more defense counsel, however, are insisting on all pro ami settlements being approved by the Circuit Court. Some are even insisting that the Court funds go through the Clerk of Circuit Court’s trust account rather than having the settlement paid directly to the plaintiff’s attorney for disbursement.
(2) An Actual “Fairness” Hearing is Required to Approve the Settlement Alabama law requires an actual hearing to determine the fairness of the minor’s settlement by the Circuit Court. Large v. Hayes by and through Nesbitt, 534 So.2d 1101 (Ala. 1988). This is more than a rubber stamp hearing and the final order should include findings of fact and conclusions of law finding that the settlement amount, attorneys fees, and expenses are all fair and in the best interest of the minor. All medical bill s and subrogation claims or liens must be addressed.
(3) A Guardian ad Litem Should be Appointed Although technically not required, most Circuit Judges will require the appointment of a Guardian ad Litem to determine whether the settlement is in the best interests of the child. This is the best practice. See generally, Alabama Rule of Civil Procedure 17(c); Large, supra. Mark Jones actively handles personal injury claims involving minors. Please call Mark Jones today for your free consultation regarding your child’s personal injury claim at 706-225-2555.
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