Putting Kids’ Claims to Bed… For Good: Settlement of Minors’ Injury Claims
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2 min read
Overview
Settlement of minors’ injury claims in Alberta can be a lengthy and costly process, as the limitation period does not begin to run until the minor reaches 18 years of age. While claims can be settled earlier, there remains a risk of re-litigation once the minor turns 18 unless the settlement has been approved by Court Order under the Minors’ Property Act. Although a Guardian’s Acknowledgment of Responsibility Form may permit net settlement funds of less than $25,000 to be paid directly to a guardian, it does not eliminate the risk of the minor re-litigating the claim upon reaching adulthood. Only a Court Order under the Minors’ Property Act provides protection against the future re-litigation of a minor’s claim.
When a child is injured in Alberta, everyone wants closure. However, with minors, “closure” isn’t automatic, and if the right steps aren’t taken, a claim that seemed settled can come back years later. Fortunately, preventing re-litigation is possible. It just requires understanding of the rules and following a few key steps.
In Alberta, the limitation periods to bring injury claims is generally two years from the date of injury. However, for minors, the limitations period does not start until they turn 18, expiring when they turn 20, which could be 10 to 19 years after the incident occurred, prolonging risk and cost.
The Risk of Re-Litigation After Age 18
While claims for minors are often brought while they are still underage, contracts entered into by minors are voidable. Therefore, if settlement of a minor’s claim is achieved before they turn 18, the minor, upon turning 18, can claim the settlement void and re-litigate their claim, claiming further injury and damages despite some payment already having been made.
How the Minors' Property Act Creates Finality
Fortunately, this risk can be mitigated, allowing for earlier settlement of minors’ claims. Under the Minors’ Property Act, SA 2004, c M-18.1 (the “Act”) and through the Office of the Public Guardian and Trustee (“OPGT”), a defendant is able to settle claims of minors in a way that also prevents them from bringing claims when they turn 18. Under s.4 of the Act, if a representative has agreed to a settlement of a minor’s claim, the Court may confirm the settlement, becoming binding on the minor as if it were a judgment. In other words, if the minor then tries to bring another injury claim from the same incident once they turn 18, they are legally prevented or estopped from doing so.
In order to obtain this protection, the defendants may obtain the approval and consent of the Office of the Public Guardian and Trustee and must obtain a Court Order approving the settlement of the minor, regardless of the size of settlement. There is a fee associated with obtaining the approval of the OPGT. The amount varies on the size of the settlement. If the OPGT does not consent to the settlement, an application may be brought to the Court.
Guardian’s Acknowledgement vs. Court Approval
For net settlements of $25,000 or less, the OPGT has suggested that a Guardian’s Acknowledgement of Responsibility Form is sufficient and a Court Order is not necessary. This form allows for payment of the minor’s settlement to go to their guardian, who then acknowledges they are responsible for managing the funds in the best interest of the minor, and means they must put the minor’s needs first. However, a Guardian’s Acknowledgement does not protect the defendant from re-litigation in the future. A Court Order is the only way to prevent re-litigation of a minor’s settled injury claim.
Key Takeaway for Insurers + Adjusters
In short, if you want to put a minor’s claim to bed, regardless of the size of settlement, you need a Court Order under the Minors’ Property Act approving the settlement.
Before closing a file involving an injured minor, consider whether the settlement has been structured to provide true finality. A Court Order under the Minors’ Property Act remains the only mechanism that protects against future re-litigation of a settled minor’s claim. If you would like assistance evaluating a settlement or obtaining the necessary approvals, please contact Emily Smeaton in Edmonton, Jane Freeman in Calgary or any member of Field Law's Insurance Group.
