Minors are not considered, under the law, competent to bring legal actions on their own behalf. Therefore, a guardian must be appointed to manage the litigation for them. This is called a guardian ad litem. Usually, the guardian is a parent or prior legal guardian.
The court reviews an application for guardian ad litem to make sure that the child’s interests are being protected. The court also reviews the contingency fee agreement to make sure it is fair to the minor.
Once designated, the guardian ad litem makes legal decisions for the minor and can agree to a settlement. If a settlement is reached, court approval must be obtained before it can become final. This is called a minor’s compromise. The court reviews the facts of the case, the terms of settlement and the attorney’s fee and demands that the money be placed in a restricted account.
The court wants to make sure that the minor’s interests are being protected. Any money received on behalf of a minor, unless required to provide for special medical needs (as approved by the court during the minor’s compromise hearing), is placed into a restricted account that cannot be accessed prior to the minor’s 18th birthday.
If money is required before that time, a petition must be made to the court for special access to the funds and a court order must be presented to the bank. The guardian ad litem is not paid any compensation for serving in this capacity.