In the case of child's compensation the court has to approve any settlement.

There will usually be a Court Order for a childs compensation directing that the monies be paid into a fund held by the Court Funds Office (‘CFO’). The CFO is then responsible for looking after the money until your child’s 18th birthday unless the Court Order indicates otherwise.

In some circumstances, it may be possible to demonstrate to the Court that it would be in the better interests of a childs compensation to allow for investment elsewhere. For very high-value claims, a Deputy may be appointed to act (usually a professional deputy rather than a family member), and the Deputy will make decisions about managing the compensation funds and is required to report to the Court of Protection.

In other cases a childs compensation is either held as a cash deposit in the Court Funds Office’s Special Account, which pays a competitive rate of interest, with no tax deduction, or some of it may be used to buy equity investments, usually units in the Ministry of Justice’s in-house Equity Index Tracker Fund. Money invested in this way would be likely to increase in value over the medium to longer term. Any leftover money is then held as a cash deposit in the Court Funds Office’s Special Account.

It is possible to ask the Court to pay out some of the monies before a child’s 18th birthday, as discussed at the end of this blog.

Investing Monies

The way that the funds are invested will depend on the direction made by the Judge at the close of your childs compensation case.

This may be for:

• Capital Growth (this means that a considerable amount will be held in equities and a smaller amount as a cash deposit in the Special Account)

• Capital Growth with some income (which means a more even balance between equity investment and cash deposit in the Special Account)

• Maximum Income (which means that it will be held as a cash deposit in the Special Account)

Deliberation is given by the Court Funds Office as to how the money has been given and how long the funds are estimated to stay in Court. Each case is different but, as a rule, where the award is for £5,000 or less, or there are less than 5 years until your child reaches 18, then the money will be deposited in the Special Account. In other cases, according to the investment guidance that the CFO receives, a section will be used to buy equity investments and the remaining money placed as a cash deposit in the Special Account.

The Equity Index Tracker Fund

As stated above, if your child is getting £5,000 or more and there are more than 5 years until your child is 18 years of age, then a share of the money will be used to purchase equity investments, generally units in the Ministry of Justice’s in-house Equity Index Tracker Fund.

This is a low-cost fund, which is only accessible for funds held in Court and those funds managed by agencies of the Ministry of Justice. There is no preliminary fee or commission when buying or selling these units. The fund mostly tracks the main UK market but also follows overseas markets as well. This spreads the risks and allows it to benefit from a range of stock markets.

Payments from Children’s Accounts

The Court will make a decision as to what will happen to the money when your child reaches 18 years old. Normally, it will decide that your child may apply directly to the Court Funds Office for the money once they reach 18. In those situations, between 6-8 weeks prior to your child’s 18th birthday, the Court Funds Office will write to them clarifying how they can gain the money once they reach 18.

The Court will send to your child the required forms to be finished. The form gives full directions on how to complete it and the additional letter from the Court also offers assistance.


All equity investments on behalf of your child will be held in the name of the Accountant General of the Supreme Court. The rules of the Court mean that, when a child reaches 18 years old, the equity investments must either be sold or transferred into your child’s name. Full directions will be given at this time by the Court.

Payments before a child is 18

If your wishes to receive money before his or hers 18th birthday, you as a Litigation Friend may apply on behalf of your child for a portion payment of funds. This application must be made to the Court.

In most cases, you as the Litigation Friend will be requested to describe to the Court what the money is for and why it is helpful and advantageous for the child. For example, if it is for a computer, you will be asked to deliver evidence of the cost (such as a quote from a shop or extract from a website). It may also be recommended to you to send any supporting documentation that will contribute to your claim, e.g. a letter from your child’s school.

This application will then be considered by a Judge who will choose whether or not the request for the money should be given. The Judge may also wish to have a Hearing with you and/or you child before making this decision. A small fee may apply for making the application.

About Medical Solicitors

Our friendly team of specialist lawyers at Medical Solicitors have a lot of experience in bringing successful medical negligence claims.

Compensation can be claimed where there has been delay in getting a patient to hospital, delay in diagnosis, inappropriate advice given concerning  care options and risks and benefits of such options, where there have been excessive delays in providing actual treatment, or where there has been any substandard care that amounts to actual Medical Negligence. 

Do contact our friendly team of specialist lawyers at Medical Solicitors. We conduct most of our Clinical and Medical Negligence claims under ‘No Win, No Fee’ agreements, also known as Conditional Fee Agreements. So, you do not have to worry about how you are going to afford to bring a medical negligence claim for compensation. You have nothing to lose in speaking to us.

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Caroline Moore

Managing Director/Head of Sheffield Office

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