The purpose of compensation is to put a successful claimant back in the position they would have been in, but for the negligence. Of course, it’s not possible to reverse a serious Erb’s palsy injury, but compensation can go some way to improve the quality of life for those who have the condition. In this section you will find information on managing Erb’s palsy compensation and how your compensation can be used to maintain certain standards of living.

If a claimant succeeds with a claim they’ll be awarded compensation by the court in two categories:

  • Compensation for suffering incurred and for the loss of an ability to do things they might otherwise have done
  • Compensations for direct financial losses associated with the injury.

Here you will find more information on what compensation can help pay for, how it’s managed on behalf of your child by the Court Funds Office, and the role of a personal injury trust fund.

What will compensation pay for?

What is the Court Funds Office?

What is a personal injury trust fund?

What will compensation pay for?

Compensation for an Erb’s palsy injury can help pay for:

  • Aids and equipment in the home to assist with domestic tasks
  • Adaptations within the home, such as adapted washing facilities
  • Adapted vehicles which only require the use of one arm to control
  • Loss of earnings related to loss of advantage on the labour market
  • The costs of additional care and assistance if needed
  • The costs of paying someone to assist with DIY and gardening
  • Costs of occupational therapy
  • Costs of physiotherapy.

If a child with Erb’s palsy receives compensation, the sum will be held for them by the Courts Funds Office or in a private personal injury trust until they are 18 years of age. Parents can request the release of funds for the benefit of the child (see below).

If you are an adult with Erb’s palsy and have received damages, you have the option of investing it in a personal injury trust fund to protect it from being included in any means-testing for welfare benefits.

See below:What is a personal injury trust fund?

What is the Court Funds Office?

The Court Funds Office (CFO) is run by the Ministry of Justice and provides a banking, administration and investment service for courts in England and Wales. One of its purposes is to hold and invest damages for those who are unable to manage this themselves, either because of their age or because they are mentally incapacitated.

When a child is awarded damages as part of a negligence claim, the money cannot simply be paid to the parents on conclusion of the case. The funds must be paid into the CFO, and it will invest and hold the damages for the child until they reach 18 years of age.

The CFO can offer various investment options, from a straightforward savings deposit account to more complex equity tracker funds that could offer better interest rates over the longer term.

As parents, you can apply to the CFO to release funds before your child is 18, but you must demonstrate that the reason is in the best interests of your child e.g. to pay for private physiotherapy.

Alternatively, the judge may agree at the infant approval settlement hearing that the funds can be paid into a personal injury trust fund for your child (see below). This is usually because these trusts provide better interest rates than the CFO.

If funds are to be taken out of the CFO, the judge must be satisfied that they will be invested wisely i.e. in an account yielding a higher return of interest. With larger sums, the court may ask that a professional trustee oversees the investment and agrees to any required expenditure before your child reaches 18 years of age.

To ensure the best investment for your child, you should discuss your options with your solicitor and an independent financial adviser (IFA).

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What is a personal injury trust fund?

A personal injury trust fund is a specific type of trust deed that allows an injured party to place their compensation sum within a trust structure, under the management of at least two trustees. The injured party can be a trustee themselves, along with another person (usually a close family member). The compensation sum will be paid into your trust, rather than your bank account.

The purpose of a personal injury trust is to legitimately protect your compensation funds from being taken into account if you’re claiming, or wish to claim, a means-tested welfare benefit. It means that the sum you receive will not affect any benefit you may be entitled to.

A trust fund is often set up for children, who will then be entitled to dissolve the trust upon reaching the age of majority (usually age 18). If there is a high level of damages, the court may allow a child’s money to be taken out of the Court Funds Office (CFO) and invested privately within the protection of a trust and a professional trustee. This ensures that the funds are protected in the best interests of the child until they reach the age of majority.

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