As a personal injury attorney in South Texas, I’m often involved with lawsuits and settlements involving minor children. Because the minor lacks the capacity to enter into a legal contract, how can a minor accept a settlement offer? Can the parents accept the settlement on behalf of the child? Does the money simply then go to the parent? How can the child be protected? These are all terrific questions and the court has figured out a way to approve settlements for the minor children and at the same time, protect the settlement until the child is of age.
The court has set up what is called a “Friendly Suit” to resolve situations involving minors. A Friendly Suit is a court-approved settlement where the parties must go before a judge and have a hearing in order to gain approval. It’s essentially a lawsuit brought by the parties in order to finalize the settlement.
The Friendly Suit protects the settlement proceeds as once approved, it will be deposited into the court registry until the child turns 18 years old. Once the child is of age, the court disburses the settlement proceeds. This protects the child in two ways: 1) keeping the minor from making poor financial decisions with the settlement money and 2) keeping the settlement out of the parent’s possession. It is not mandatory to have a Friendly Suit. They are only filed by the defendant to protect the defendant as the child could potentially come back at a later date and bring a lawsuit against them. Typically you’ll see a Friendly Suit filed when the settlement is of significant value.
Friendly Suit proceedings are very simple. Once filed, the judge then appoints a “guardian ad-litem”. This person is an independent attorney who reviews the case and determines if the settlement is in the “best interest of the child”. This is to ensure there is no conflict of interest in the settlement.
Once the proceeding is set, the plaintiff, defense counsel, and ad litem all go before the judge to discuss the settlement. The judge listens to each party and then makes a ruling. The typical Friendly Suit only lasts about five or ten minutes. It’s much different from other lawsuits because it’s not adversarial. Everyone has agreed to the settlement and the hearing is just to have things finalized by the court. Once approved, the settlement becomes binding and the child cannot later bring a suit against the adverse party.