When a claim is resolved by way of an out of court settlement involving a child or person under a disability, the settlement is conditional upon approval by a court of law. This is referred to as "obtaining an order for approval of a compromise" and is required in cases where a person is considered a protected person such as a child or person with a disability.
According to the District Court Rules of South Australia, a person under a "disability" is defined as follows:
a) a child; or
b) a person whose affairs are administered (wholly or in part) under a lawfor the protection of persons suffering from mental or physicaldisabilities; or
c) a person who is not physically or mentally able
(i) to manage his or her own affairs; or
(ii) to make rational decisions about taking, defending or settlingproceedings (or to communicate decisions to others).
Such an order can also be sought where a person is not a child nor has mental incapacity but due to other circumstances such as severe physical disability where he/she is heavily reliant on other persons for care and is at high risk for being the subject of undue influence. An order in these circumstances is usually limited and subject to review by the court.
The protected person requires a "litigation guardian" for the purpose of the litigation which is usually the parent or legal guardian or a guardian appointed by the Guardianship Board.
According to the District Court Rules of South Australia, "guardian" of a person under a disability is defined as follows:
a) if the person is a child, then a parent of the child; or
b) a person who is authorised to act for the person under an enduringpower of attorney; or
c) a person who is authorised to act for the person under a law for theprotection of persons suffering from mental or physical disabilities.
When a compromise is reached by the parties an opinion from an independent barrister is sought as to the appropriateness of the compromise and this opinion is then supplied to the court with an Application for approval of the compromise.
Both the barrister and the court must be satisfied that the compromise is in the best interests of the protected person.
In the majority of cases the monies paid to the protected person pursuant to the compromise is placed with the public trustee or a private trustee approved by the court. In rare cases where the compromise involves a small sum the court may, if provided with appropriate evidence, order