Minor's compromise

What it is

A minor can't sign a binding release. To settle a child's injury claim, a parent or guardian ad litem asks the court to approve the settlement, the attorney fee and the plan for holding the money. A similar process applies to adults who lack capacity.

The California rule

Probate Code 3500 lets a parent compromise a minor's disputed claim before suit, subject to court approval. Code of Civil Procedure 372 lets a guardian ad litem compromise a pending action, also with court approval. The petition is made on Judicial Council form MC-350, or the expedited MC-350EX where a case qualifies, under California Rules of Court 7.950 to 7.955. It discloses the settlement, the injuries and recovery, medical expenses and liens, and the fee requested. Under rule 7.955, the court sets a reasonable attorney fee; it considers the fee agreement but isn't bound by it. Probate Code 3600 and following control where the money goes, most often a blocked account, an annuity or structured settlement, or a trust. The bank's receipt for a blocked account is filed on form MC-356.

Why it matters to a plaintiff firm

A minor's settlement isn't final until the order is signed, and the firm can't take its fee until then. Firms collect what the petition needs, including the doctor's report on recovery and final lien figures, before the hearing, and calendar the blocked account receipt. A minor's deadline to present a government claim is not tolled, so check for public defendants early.