A child's injury claim: who holds it, who signs for it, and why a judge has to approve the settlement

Minnesota does not let a parent settle a child's injury claim. A rule of practice requires a written petition and a written order before any part of the proceeds is paid to anyone, and it applies to a claim that was never filed as much as to a case that went to verdict.

An injured child’s claim is not the claim it looks like. The child cannot bring it, the parent cannot settle it, and the money does not go where a family expects. Minnesota handles all three of those through a statute written in 1800s language and a rule of practice that is more specific than the statute and reaches further.

Who may bring it

Minn. Stat. § 540.08 opens with four sentences that assign the action, and they run in descending order of who is available:

A parent may maintain an action for the injury of a minor son or daughter. A general guardian may maintain an action for an injury to the ward. A guardian of a dependent, neglected, or delinquent child, appointed by a court having jurisdiction, may maintain an action for the injury of the child. If no action is brought by the father or mother, an action for the injury may be brought by a guardian ad litem, either before or after the death of the parent.

Minn. R. Civ. P. 17.02 supplies the procedure the statute assumes. Paragraph (a) states the two routes: a party who is an infant or incompetent and has a representative duly appointed “under the laws of this state or the laws of a foreign state or country” may be sued for or defended by that representative, and a party in that position who “is not so represented shall be represented by a guardian ad litem appointed by the court in which the action is pending or is to be brought.” The appointee “shall be a resident of this state, shall file a consent and oath with the court administrator, and shall give such bond as the court may require.”

One sentence in Rule 17.02(a) exists to prevent a specific confusion, and it is worth knowing about because the same phrase means something different two doors down the courthouse: “A guardian ad litem appointed under this Rule is not a guardian ad litem within the meaning of the Rules of Guardian Ad Litem Procedure in Juvenile and Family Court and is not governed by those Rules.”

Paragraph (b) says who may ask. “Any person, including an infant party over the age of fourteen (14) years and under no other legal disability, may apply under oath for the appointment of a guardian ad litem,” and “The application of the party or the party’s spouse or parents or testamentary or other guardian shall have priority over other applications.” Where no appointment has been made on behalf of a defendant party before answer or default, the adverse party or that party’s attorney may apply, and “in such case the court shall allow the guardian ad litem a reasonable time to respond to the complaint.”

Paragraph (c) lists what the application must show, “under oath or penalty of perjury in accordance with Minnesota Statutes, section 358.116” — the party’s name, age and address; for a minor, the parents’ names and addresses, or the custodian’s or guardian’s if the parents have died or abandoned the minor; the party’s spouse’s name and address; the proposed appointee’s name, age, address, and occupation; and “all facts and circumstances of the adversity or potential adversity of the person whose appointment is sought to the party, if any.”

That last item explains paragraph (d), which splits notice in two. Where a non-adverse party, spouse, parent, custodian or guardian applies, “the court may hear the application with or without notice.” In every other case written notice is mandatory and has to be served on the party, the party’s spouse, parent, custodian and guardian.

The approval requirement, and how far it reaches

Minn. Gen. R. Prac. 145.01 is the provision that governs the end of a child’s claim, and its first sentence is absolute:

No part of the proceeds of any action or claim for personal injuries on behalf of any minor or incompetent person shall be paid to any person except under written petition to the court and written order of the court as hereinafter provided.

The second sentence then extends it in both directions:

This rule governs a claim or action brought by a parent of a minor, by a guardian ad litem or general guardian of a minor or incompetent person, or by the guardian of a dependent, neglected or delinquent child, and applies whether the proceeds of the claim or action have become fixed in amount by a settlement agreement, jury verdict or court findings, and even though the proceeds have been reduced to judgment.

Two words carry the weight. “Claim” sits alongside “action,” so the rule does not wait for a summons. And “any person” means the payment restriction is not limited to payments to the child — it covers payment to a parent, to a lawyer, and to a lienholder.

Minn. Stat. § 540.08 states the narrower version of the same requirement in its closing sentence: “No settlement or compromise of the action is valid unless it is approved by a judge of the court in which the action is pending.” The statute is written for a pending action. The rule is not.

What the petition has to contain

Rule 145.02 requires the petition to be verified by the parent or guardian and filed before the court makes its order, and lists five items:

(a) The name and birth date of the minor or other incompetent person.

(b) A brief description of the nature of the claim if a complaint has not been filed.

(c) An attached affidavit, letter or records of a health care provider showing the nature of the injuries, the extent of recovery, and the prognosis if the court has not already heard testimony covering these matters.

(d) Whether the parent, or the minor or incompetent person, has collateral sources covering any part of the principal and derivative claims, including expenses and attorneys fees, and whether subrogation rights have been asserted by any collateral source.

(e) In cases involving proposed structured settlements, a statement from the parties disclosing the cost of the annuity or structured settlement to the tortfeasor.

Item (d) is the one that repays attention. It distinguishes “the principal and derivative claims” — the rule assumes there may be more than one claim arising from the same injury — and it requires the court to be told what any collateral source has asserted. Who gets repaid out of a recovery, and under which statute, is the subject of the repayment guide.

Item (e) requires a disclosure that is not ordinarily made. In a structured settlement, the cost of the annuity to the defendant and the face value of the payment stream are different numbers, and the rule directs that the court be told the first one.

The disclosure required of the lawyer who presents the petition

Rule 145.03(a) addresses a practice specific to this kind of proceeding — the petition being brought by counsel for the other side:

If the lawyer who presents the petition has been retained by the tortfeasor or its insurer, the lawyer shall disclose to the court and to the petitioner the nature of the representation, how he or she is being paid, the frequency with which the lawyer has been retained by the tortfeasor or insurer, and whether the lawyer is giving legal advice to the petitioner. The petition shall not be denied by the court solely because of the petitioner's representation.

Four items, and the third — “the frequency with which the lawyer has been retained by the tortfeasor or insurer” — is unusual. It asks about a pattern rather than about this matter.

Paragraph (b) gives the court an independent route: it “may, at its discretion, refer the petitioner to a lawyer selected by the petitioner (or by the court if petitioner requests or declines to select a lawyer), to evaluate the proposed settlement and advise the court whether the settlement is reasonable considering all relevant facts.” The opinion must be in writing, the court provides a copy to the petitioner and to all tortfeasors or their representative, and the appointment is made under Minn. R. Evid. 706. Paragraph (c) requires the referred-to lawyer to agree “not to represent the petitioner or the minor or accept a referral fee in the event that the petition is denied by the court,” and paragraph (d) puts the cost of that opinion on the tortfeasor or insurer, subject to reimbursement of up to one half from the settlement proceeds on court order. Paragraph (e): “The opinion of the referred-to lawyer shall not be binding upon the court.”

The hearing, and the order

Rule 145.04 is short and requires attendance: “The minor or incompetent person and the petitioner shall personally appear before the court at the hearing on the petition unless their appearance is specifically waived by the court because the action has been fully or partially tried or for other good cause.” A record is kept when the court orders it, and “The hearing shall be ex parte unless otherwise ordered.”

Rule 145.05 then sets out what the order must do.

Paragraph (a): approve, modify or disapprove the proposed settlement or disposition, and specify the persons to whom the proceeds are to be paid.

Paragraph (b) requires the court to justify a low number rather than merely permit one. If the court approves a settlement “for an amount which it feels is less than what the injuries and expenses, might seem to call for,” it must state the reason, and the rule supplies the examples: “limited insurance coverage, dubious liability, comparative fault or other similar considerations.”

Paragraph (c) determines what expenses come out of the recovery, including the attorney’s fee, and imposes a ceiling: “Attorney’s fees will not be allowed in any amount in excess of one-third of the recovery,” subject to a two-part exception requiring both that an appeal has been perfected with the plaintiff’s lawyer’s brief printed in it and that there has been “an expenditure of time and effort throughout the proceeding which is substantially disproportionate to a one-third fee.” The same paragraph disallows separate reimbursement of investigator services and mileage on top of the fee, except where the fee is not fully compensatory or where the investigation had to be conducted so far from the lawyer’s principal office that travel would be substantially equal to or exceed usual investigating expenses.

Paragraph (d) governs the balance. The court may authorise investment “in securities of the United States, or in an annuity or other form of structured settlement, including a medical assurance agreement,” but otherwise “shall order the balance of the proceeds deposited in one or more banks, savings and loan associations or trust companies where the deposits will be fully covered by Federal deposit insurance.” A surety bond may be substituted under paragraph (d)(2).

Paragraph (e) is the plumbing, and it is designed so that the money never passes through the parent’s hands. The order directs “that the defendant pay the sum to be deposited directly to the financial institution”; that the account be opened in the minor’s name and any deposit document issued in that name; that the institution acknowledge receipt of the order to the court and confirm “that no disbursement of the funds will occur unless the court so orders”; that the institution “shall not make any disbursement from the deposit except upon order of the court”; that two or more institutions be used if necessary to keep the proceeds plus future interest fully within federal deposit insurance; that “time deposits shall be established with a maturity date on or before the minor’s age of majority”; and that the petitioner “file or cause to be filed timely state and federal income tax returns on behalf of the minor.”

Minn. Stat. § 540.08 supplies the statutory version of the same restriction, and adds a bond requirement in front of it: before a parent receives property as a result of the action, “the parent shall file a bond as the court prescribes and approves as security therefor,” with an investment alternative available on petition. The statute then provides that “Money or assets in an account established by the court under this section are not available to the minor child or the child’s parent or guardian until released by the court to the child or the child’s parent or guardian.” How that restriction interacts with a release signed on a child’s behalf is discussed in the release guide.

Two claims, and a clock this page does not compute

Rule 145.02(d) refers to “the principal and derivative claims,” and Minn. Stat. § 540.08 begins by giving a parent an action “for the injury of a minor son or daughter.” Those texts indicate that more than one claim can arise from a single injury to a child. What this page will not do is allocate particular items of loss between them, because the allocation determines whose claim is subject to which limitation period and that is precisely the kind of question that turns on pleading and on facts.

The limitation machinery itself is set out in the deadlines guide. What is worth noting here is only how Minn. Stat. § 541.15(a) is drafted: it suspends the running of a limitation period for enumerated grounds of disability, and clause (1) states the ground as “that the plaintiff is within the age of 18 years.” The suspension is written by reference to the plaintiff. Paragraph (b) then sets a different structure for actions “alleging malpractice, error, mistake, or failure to cure, whether based on contract or tort, against a health care provider,” under which the minority suspension “may not be extended for more than seven years, or for more than one year after the disability ceases.”

Anyone reading this page about a real child’s claim should treat the deadline as a question to be answered from the file rather than from a rule of thumb. A claim against a public body carries the much shorter notice period described in the government claims guide, and that is the deadline most likely to be missed while a family waits to see how a child recovers.

What this page is not

It describes who Minnesota law permits to bring a child’s injury claim, what a guardian ad litem appointment requires, and what the petition, hearing, and order for approval of a minor’s settlement must contain. It does not evaluate whether a proposed settlement is reasonable, allocate damages between a child’s claim and a parent’s, or calculate any deadline. Rule 145.05(a) puts the first of those with a judge, and the rest depend on facts and papers this page has not seen.