OPTIONS FOR PERSONAL INJURY PLAINTIFFS WITH LIMITED CAPACITY

by Thomas D. Begley, Jr., Esquire, CELA and Ethan J. Ordog, Esquire

            It is imperative that the capacity of a personal injury plaintiff is considered to ensure that legal authority to participate in and/or settle a civil claim is established.  Often, in seeking to ensure that claims are pursued for the benefit of the injured individual, there are issues that arise related to the plaintiff’s ability to understand the proceedings or properly participate based upon a limitation in cognition.  Frequently individuals believe that if a personal injury victim has diminished capacity, it is necessary for a Guardian to be appointed.  That is not always the case.  In consideration of the impact that the filing for guardianship can have on an individual’s rights, as well as the time and expense involved in obtaining a guardianship, it is important to consider all potential protective arrangements.  These include Power of Attorney, Supported Decision-Making, Conservatorship and Guardianship.

• Levels of Capacity. Before assuming that the personal injury plaintiff lacks capacity, an analysis should be made as to that person’s level of capacity.  What are the various levels of capacity.
  • Power of Attorney. To execute a Power of Attorney, the individual must have contractual capacity.  This means that the individual signing the Power of Attorney must be capable of understanding and appreciating the extent and effect of the document.  This is a higher standard than testamentary capacity.  It is important to recognize that a Power of Attorney allows an individual to direct for the appointment of an agent to assist them.  The execution of a Power of Attorney is not intended to transfer decision making or eliminate the involvement of the individual.
  • Supported Decision-Making Agreement. For supported decision-making there are statutes in Alaska, Colorado, Delaware, Illinois, Indiana, Louisiana, Nevada, New Hampshire, New York, North Dakota, Rhode Island, Texas, Virginia, Washington, Washington D.C., and Wisconsin. To date, neither New Jersey nor Pennsylvania has adopted such a statute.  It is unclear as to what level of capacity is required to sign a Supported Decision-Making Agreement.  It is anticipated that Supported Decision-Making will continue to become more prevalent based upon the trends and advocacy in the disability community.
  • Guardian. For a perspective Guardian, under J.S.A. 3B:1-2, “incapacitated individual” means an individual who is impaired by reason of mental illness or intellectual disability to the extent that the individual lacks sufficient capacity to govern himself and manage his affairs.  Guardianship requires a Court Order to establish a lack of capacity, based upon the submission of required medical proofs.  A Guardian formally steps into a decision-making role for the individual and has authority over affairs, depending on the scope directed by the Court.
  • Conservator. An individual, with capacity, who consents to the arrangement, can seek the appointment of a Conservator to manage financial affairs.  Based upon an individual’s age, physical infirmity or illness, the Court can then direct for the appointment of an individual with authority to resolve matters related to the individual’s financial decisions/management of assets.  This authority conferred does not require a finding of incapacity.
• Authority Granted. Under a Power of Attorney, the injured plaintiff could designate one or more individuals to act on his or her behalf with respect to medical and financial decisions.

Under a Supported Decision-Making Agreement, the individual would agree with a “trusted advisor,” often a family member or friend, to assist with decision-making often with respect to financial matters.

With respect to a Guardian, the Guardian could be appointed Guardian of the Person, which would include making medical decisions, and/or also Guardian of the Property, which would include making financial decisions.

For a Conservator, the appointment is limited to financial affairs and the scope of authority is usually not as broad as a Guardian, unless otherwise directed by the Court.

• Rights Surrendered. Under a Power of Attorney, the injured plaintiff does not surrender any rights.  The document can give the Health Care Representative or Agent under the Power of Attorney the right to act immediately as a matter of convenience, or that right can be delayed until the injured plaintiff is no longer mentally able to act on his or her own behalf.

Under a Supported Decision-Making Agreement, the injured plaintiff does not really surrender any rights either.  They simply look to a third party to assist them in decision-making.

Under a Guardianship, the injured plaintiff has little or no rights.  They may lose the right to vote, the right to marry, and the right to make medical or financial decisions.

In a Conservatorship, the individual retains decision making in most matters, but for the assistance of the Conservator in the management of financial affairs  in the individual’s best interest.