The Tort Report: Fall 2022

REcent Changes to the georgia minor settlement statute

By: Gillian Crowl

In May 2022, the Georgia Legislature made significant changes to the minor settlement statute which makes it easier to understand when court approval and a conservator are necessary and increases the amount that can be paid to settle a minor’s claim before a court must approve the settlement.

Under the prior version of the statute, court approval was not required if the gross settlement, after being reduced by attorney's fees, expenses of litigation and medical expenses that would be paid from the settlement proceeds, was less than $15,000.00. “Gross settlement” was defined as “the present value of all amounts paid or to be paid in settlement of the claim, including cash, medical expenses, expenses of litigation, attorney's fees, and any amounts paid to purchase an annuity or other similar financial arrangement.” When minor settlements reached that $15,000.00 threshold, court approval was mandated, which in turn required the parent or guardian be appointed as a conservator for the minor child. The conservatorship step often delayed the approval of the settlement.

Under the revised version of the statute, the legislature increased the amount that can be paid to settle a minor’s claim without court approval to $25,000.00.¹ In addition, the revised statute more clearly delineates when court approval and the appointment of a conservator will be required, including specifically addressing reductions of the gross settlement amount by costs and expenses, the “net settlement” and its impact on the need for court approval and the appointment of a conservator. The statute defines “net settlement” as the gross settlement reduced by (1) attorney's fees, expenses of litigation and legally enforceable liens against the settlement that are to be paid from the settlement proceeds; (2) the present value of amounts to be received by the minor after reaching the age of majority; and (3) the present value of amounts to be placed into a trust that the court approves or creates for the benefit of the minor.²

Under the revised version of the statute, if the proposed gross settlement of a minor's claim is less than $25,000.00, court approval is not required and a conservator need not to be appointed.³ If the proposed gross settlement of the minor's claim is more than $25,000.00, but the net settlement is less than $25,000.00, court approval is required but the appointment of a conservator is not required.⁴ Court approval can be sought in the probate court where the minor resides, or if legal action has been initiated, in the court in which the legal action is pending. However, if the proposed gross settlement of a minor's claim is more than $25,000.00 and the net settlement is more than $25,000.00, then court approval is required and a conservator must be appointed to compromise the claim and receive payment of the settlement.⁵ Importantly, if a conservator was already appointed for the minor, the conservator is required to compromise the claim.

These changes will make it easier to resolve claims with minors. By clearly defining “net settlement” and allowing for payments made after the minor reaches majority to reduce the gross settlement amount, insurers can be more creative in how they structure settlements with minors to ensure a more efficient court approval process without the parent or guardian having to be appointed as a conservator.

¹O.C.G.A. § 29-3-3(c).
²O.C.G.A. § 29-3-3(2).
³O.C.G.A. § 29-3-3(c)(1).
⁴O.C.G.A. § 29-3-3(c)(2).
⁵O.C.G.A. § 29-3-3(c)(3).

Attorney Contact Info

Gillian Crowl
gillian.crowl@swiftcurrie.com 
404.888.6252