With 16 year-olds climbing Mount Everest and sailing alone around the world, there seems to be no limit to what dangers children will encounter, although for most kids, those dangers are no more exotic than riding in a car.  When minors are injured and receive monetary settlements, certain procedures are required by law. These steps have nothing to do with the personal circumstances of the child or parents.  Every minor is treated the same way.

First, the Court (judge) must approve any settlement and all disbursements (payments) out of the settlement, including attorney’s fees, expenses, outstanding medical bills or liens, and the disposition of the child’s “net” recovery.  Usually, a parent testifies that he or she approves of the settlement.  However, the court will appoint a “Guardian ad Litem,” an attorney who represents the child’s individual interests and provides an unbiased view of the settlement.  The Guardian ad Litem advises the judge whether the settlement and all disbursements are fair and in the minor’s best interests.

When I represent a minor, I am hired by the parents.  Because the Guardian ad Litem’s is “hired” by the Court, that attorney serves as a buffer between the minor, his parents and me.  The Guardian ad Litem has a duty to act in the best interests of the minor, even if those interests conflict with the parents and/or me.  I work to avoid such conflicts, but the Guardian ad Litem serves as a safety valve.

When a minor’s case is settled, the judge has the following options to place funds awarded to the minor:

1.  Money may be placed into the Registry of the Court.  This is an account maintained by the District Clerk.  It earns a very small amount of interest.  Funds may only be withdrawn prior to the minor’s 18th birthday by order of the Court.  Once the minor turns 18, he may withdraw the money (all of it) by filing a form with the District Clerk.  Judges are hesitant to place large sums in the Registry, most young people cannot manage a large lump sum of money.  Most judges will only place funds into the registry if there is an immediate need for cash on or before the time the minor turns 18.

2.  Money may be deposited into a federally insured bank account.  This account will have the same restrictions as funds in the Registry of the Court, and there is no benefit to using a bank instead of the Registry of the Court.  The interests rates are probably better with the Registry because the District Clerk negotiates a better interest rate with its bank than an individual would receive, and FDIC protections still apply.  Placing the money in a bank account is no safer than keeping it with the District Clerk.

3.  The Court may create a Trust.  A Trust is a legal entity, like a corporation.  Trusts have restrictions on investment and expenditure of funds and are managed by a Trustee, typically a bank’s trust department or bonded trust company.  A family member of the minor cannot serve as Trustee for a trust funded by a settlement.  Trusts are expensive to set up and maintain, so they are only used in large settlements ($300,000.00 or more), or when there is a need for ongoing expenditures for support, medical or educational expenses.

4.  The funds may be placed into a “structured settlement.” This is an annuity contract written by a life insurance company.  In exchange for a lump sum payment (premium), the life insurance company makes payments to the the minor after he reaches adulthood, on a schedule the Court approves.  Many structured settlements are designed to help the minor pay for college.  The payments the minor receives are part principal (the premium) and part interest.  Most payments are not taxable, and they are guaranteed, which means the money will be paid regardless of whether the minor uses the funds for a specific use (such as college).  If the minor dies before the payments are due, they are paid to the minor’s estate. Only very strong, large life insurance companies are allowed to write annuities for minors’ settlements.   Most judges place all minors’ funds into annuities.

For most parents, the most important concern regarding their child’s settlement is that the funds are not wasted.  Courts cannot tell an adult how to spend his money, and since annuity payments are usually made after the child reaches age 18, there is only so much that can be done to protect the young person from himself.  However, most courts try their best to do exactly that.

BP is giving a bad name to both the British and petroleum, and as the horror in the Gulf of Mexico unfolds on TV every night, I keep hoping Ryan Seacrest will appear and say it is all a big reality show engineered by media goofballs to boost ratings.  Alas, there are numerous goofballs to be found, media and otherwise, but this is no ratings ploy.  We may be witnessing the undoing of the petroleum-based culture we have so merrily depended upon since gasoline was 25 cents a gallon, by an ecological catastrophe with no visible end in sight.

We need to understand that BP, the Bad Person (our Supreme Court recently ruled that a corporation is a “person”) of the moment, is far from being alone in its disregard of the dangers of drilling.  I had what might be called a “BP moment” nearly a decade ago, and it taught me what all of us are learning now – big oil companies invest mightily in production of oil and meagerly in protection of workers and our environment.

On September 11, 2001 (yes, that day), my client Clint (not his real name) was working aboard a drill ship operating in well over 5,000 feet of water in the Gulf of Mexico.  He was part of the “ROV” (remote operated vehicle, an unmanned submarine similar to what is being used in the efforts to fix what BP has broken) crew.  The drill ship was operated by a company other than Transocean for an oil company other than BP.  ROVs were launched from a platform extended from the deck with a hand crank.  Clint was extending the platform, and it went off track.  Clint had built up a lot of momentum, and when the platform went off the track, it took Clint’s shoulder with it.  He suffered an injury that will plague him for the rest of his life.

Here are the underlying facts.  The drill ship had state of the art technology. It was kept in position by thrusters fore and aft.  On the bridge, a scope featured an icon of the ship inside a box that represented the drilling zone.  If the ship icon went outside the box, a connector on the riser (pipe) running from the rig to the floor of the Gulf would break, preventing a disruption in production.  Once the ship was back in position, two ROVs would mate the two sections of the riser, and drilling would resume.  It was amazing, futuristic, like something out of Star Trek.

Contrast that Space Age technology to the Stone Age hand crank that injured Clint.  It was designed by an “engineer” who had a PhD from an “internet university,” one that did not require any classroom time.  If the drill ship operator or the oil company had any regard for the health and safety of Clint and his coworkers, they would have never allowed that platform, or its designer, anywhere near the ship.  However, because it did not directly relate to drilling, it was not their problem.

What is playing out a mile below the surface of the Gulf, and on the shores of Louisiana, Mississippi, Alabama and Florida, is BP’s disregard for what can happen when things go wrong.  All the money went into production technology; protection technology was ignored.  BP was after profits, so 21st century solutions were employed to drill.  Safety and the environment were no more than afterthoughts, so solutions for a blowout and spill were from the the 1970s.  Now BP is trying to engineer on the fly to bridge a 30-plus year gap in technology, and it is not working.

Clint’s experience shows BP is not alone in its disregard for the safety of workers and the environment.  I expect a number of other oil companies and drillers are extremely lucky they are not in BP’s extremely dirty shoes.

Lawyers and politicians will hold BP accountable for its errors.  However, if we are going to continue to “Drill Baby Drill,” we must make sure that for all oil exploration, protection technology keeps up with production technology.