Valuation and Settlement Strategies for Day Care Negligence Cases

Daycare negligence cases present novel issues relating to valuation and settlement because the emotional and psychological damages can be difficult to quantify. Medical bills do not always accompany those damages. Furthermore, children may be unable to articulate the problems caused by an abusive situation at a daycare facility until they are more mature. By that point, the statute of limitations may have expired for certain claims.

The facility and insurance carrier usually attempt to downplay the value of the case by harping on modest medical expenses, but there are other types of damages in these situations. For example, the increased costs of childcare can be multiplied over the course of several years, and parents have a right to be reimbursed for their time away from work for doctor’s appointments. A common approach for the facility and insurance carrier in calculating the total settlement offer is to simply multiply the special damages by a factor of one or two. The plaintiffs can combat this approach with dialogue along these lines: “We can all agree that this case isn’t just another soft tissue car accident case, right?” Emotional value carries a premium.

One way to maximize the ultimate value of a case is through a structured annuity settlement. An annuity is a contractual agreement with a financial institution designed to turn a lump sum settlement into periodic payouts over time. The gross payouts from an annuity have the potential to exceed the settlement amount itself. Whether this is a good option in any particular case will depend on the unique financial situation of the child’s family. A structured annuity settlement, if untouched, may help the family pay for higher education.

O.C.G.A. § 29-3-3 governs the settlement of minor’s claims. This statute is complex, but as a general rule of thumb, a parent or natural guardian is permitted to settle a minor’s claim without becoming the conservator or seeking approval from the court when the gross amount is less than Fifteen thousand dollars ($15,000.) From a practical perspective, a settlement for small claims right below this threshold helps to avoid protracted litigation and possible attorney’s fees.

Treating a child’s case as a ‘run of the mill’ accident violates everyone’s fundamental sense of right and wrong. As trial lawyers, we hold the keys to helping secure a brighter future for injured children and their families.