Under Florida Statute 744.387, parents may not settle personal injury claims larger than $15, 000 on their children’s behalf without first getting court approval. In order to get the court’s approval, the parent files a Petition for Approval of Settlement. The petition tells the circumstances that led to the child’s personal injury, the relative fault and liability of the parties, the extent of damages, the settlement amount agreed upon by the parties, and other details. After examining these details, if the court in its independent judgment believes that the settlement is in the best interest of the child, the court will approve it.
In one case, an insurance company argued that a parent’s settlement offer was not valid until the court approved the offer and the court disagreed. Berges v. Infinity Ins. Co., 896 So. 2d 665 (Fla. 2004) Even though the parties must wait for court approval before they can execute the settlement, the offer and acceptance by the parties are valid in the meanwhile. In order to execute a settlement, the parent must sign a “release,” which essentially releases the insurance company from any future claims that the parent or child may bring against the insurance company for the injuries. In return, the insurance company provides the funds. That is typically the end of the process.
However, the court also has the option of appointing a guardian. In some cases, a court-appointed guardian is there only for the duration of the legal process to protect the child’s interests during settlement negotiations and during the distribution of settlement money. In other cases, a court-appointed guardian remains involved in the child’s life after the money has been distributed to manage the settlement money and approve expenditures. In these cases, the money is deposited into a trust or annuity and the court or guardian approves expenditures only if they find them necessary and reasonable. Commonly approved expenditures include those for housing, health care, and education.
Parents and guardians may settle claims less than $15,000 on their children’s behalf without court approval. However, once a lawsuit is filed by the parent or child, thereby inviting the court into the dispute, the court must approve any settlements reached thereafter. Some insurance companies, in order to protect themselves, require court approvals of settlements even when the court approvals are not legally mandated.
What is interesting is that parents are not allowed to settle their children’s personal injury claims at all before the injury takes place. On May 10, 2003, a father named Bobby Jones took his son Christopher to the Thunder Cross Motor Sports Park where Christopher rode an all-terrain vehicle (ATV) for recreation. During his ride, Christopher attempted a certain jump, which he had attempted at least once before and suffered broken ribs and a concussion. This time Christopher caused himself to be ejected from the ATV and, unfortunately, the ATV landed on top of Christopher. He was able to get out from underneath the ATV and even walk a short distance, but soon collapsed and died.
To gain entry into the sports park, Bobby, the father, had signed a release and waiver of liability, an assumption of risk, and an indemnity agreement. By signing these, he gave up his right to sue for Chris’s injuries or wrongful death. Chris’s mother, on the other hand, had signed nothing. She was unaware that Christ rode ATVs recreationally.
Ultimately, the court decided that pre-injury releases like the one Bobby signed could not take away a child’s right to sue for wrongful death. Therefore parents don’t have the right to settle claims before any actual injury. Decisions regarding children are often governed by what is in the child’s best interest and it would be difficult to argue that any child is best served by having no recourse for fatal injuries.
On the other hand, when a child went on an African safari, and the parents wanted to sue in court over the child’s death, the court ruled that his parents could not bring a claim to court for his wrongful death because they had signed a travel contract that provided that any claims arising out of the safari trip would be handled in arbitration. Global Travel Marketing, Inc. v. Shea, 908 So.2d 392 (Fla., 2005)
The court believed that the arbitration requirement was not the same as a pre-injury release because the child still had the right to address his grievances, although in a different forum, whereas with a pre-injury release, all rights to get a remedy are extinguished.
The court pointed out that although the state gets involved in the settlement of lawsuits, this does not necessarily extend to arbitrations. In fact, the state legislature has specifically authorized enforcement of arbitration agreements, exempting only disputes involving custody, support, and visitation. See Florida Statute § 44.104(14) (2004).