                                 CODE OF VIRGINIA

APPROVAL OF COMPROMISES ON BEHALF OF PERSONS UNDER A DISABILITY IN SUITS OR
ACTIONS TO WHICH THEY ARE PARTIES (§ 8.01-424)

A. In any action or suit wherein a person under a disability is a party, the
court in which the matter is pending shall have the power to approve and confirm
a compromise of the matters in controversy on behalf of such party, including
claims under the provisions of any liability insurance policy, if such
compromise is deemed to be to the interest of the party. Any order or decree
approving and confirming the compromise shall be binding upon such party, except
that the same may be set aside for fraud.

B. In case of damage to the person or property of a person under a disability,
caused by the wrongful act, neglect, or default of any person, when death did
not ensue therefrom, any person or insurer interested in compromise of any claim
for such damages, including any claim under the provisions of any liability
insurance policy, may, upon motion to the court in which the action is pending
for the recovery of damages on account of such injury, or if no such action is
pending, then to any circuit court, move the court to approve the compromise.
The court shall require the movant to give reasonable notice of such motion to
all parties and to any person found by the court to be interested in the
compromise.

C. A compromise action involving a claim for wrongful death shall be in
accordance with the applicable provisions of &#xA7; 8.01-55. Nothing in this
section shall be construed to affect the provisions of &#xA7; 8.01-76.

D. In any compromise action, the court shall direct the payment of the proceeds
of the compromise agreement, when approved, as follows:

   1. Payment of the sum into court as provided by &#xA7; 8.01-600 or to the
   general receiver of such court;

   2. In the case of damage to the person or property of a minor, by investment
   in a college savings trust account for which the minor is the beneficiary
   pursuant to a college savings trust agreement with the Commonwealth Savers
   Plan as set forth in subsection B of &#xA7; 23.1-707, provided that (i) the
   investment options pursuant to such agreement are restricted to target
   enrollment portfolios; (ii) the order or decree approving and confirming the
   compromise requires the minor beneficiary&#8217;s parent, as that term is
   defined in &#xA7; 22.1-1, to act as the custodian of the account; and (iii)
   except in the case of a distribution from the account to be applied toward the
   minor beneficiary&#8217;s qualified higher education expenses, as that term is
   defined in &#xA7; 529 of the Internal Revenue Code of 1986, as amended, or
   other applicable federal law, the order or decree approving and confirming the
   compromise prohibits the minor beneficiary&#8217;s parent from making any
   transfer, withdrawal, termination, or other account transaction unless the
   court provides prior approval pursuant to a written order;

   3. To a duly qualified fiduciary of the person under a disability, after due
   inquiry as to the adequacy of the bond of such fiduciary;

   4. As provided in &#xA7; 8.01-606; or

   5. Where the agreement of settlement provides for payments to be made over a
   period of time in the future, whether such payments are lump sum, periodic, or
   a combination of both, the court shall approve the settlement only if it finds
   that all payments which are due to be made are (i) secured by a bond issued by
   an insurance company authorized to write such bonds in this Commonwealth or
   (ii) to be made or irrevocably guaranteed by an insurance company or companies
   authorized to do business in this Commonwealth and rated &#8220;A plus&#8221;
   (A+) or better by Best&#8217;s Insurance Reports. Payments made under this
   subdivision totaling not more than $4,000 in any calendar year may be paid in
   accordance with &#xA7; 8.01-606. Payments made under this subdivision totaling
   more than $4,000 in any calendar year while the recipient is under a
   disability shall be paid to a duly qualified fiduciary after due inquiry as to
   adequacy of the bond of such fiduciary.

E. Payments made under this section, in the case of damage to the person or
property of a minor, may be made payable in the discretion of the court to the
parent or guardian of the minor to be held in trust for the benefit of the
minor. Any such trust shall be subject to court approval and the court may
provide for the termination of such trust at any time following attainment of
majority which the court deems to be in the best interest of the minor. In an
order authorizing the trust or additions to an existing trust, the court may
order that the trustee thereof be subject to the same duty to qualify in the
clerk&#8217;s office and to file an inventory and annual accountings with the
commissioner of accounts as would apply to a testamentary trustee.

HISTORY: Code 1950, §§ 8-169, 8-170; 1956, c. 575; 1960, cc. 301, 302; 1964,
c. 500; 1970, c. 10; 1977, c. 617; 1985, c. 499; 1988, c. 409; 1991, cc. 97,
257; 1993, c. 945; 1994, c. 39; 1998, cc. 584, 607, 610; 2009, c. 688; 2022, c.
535; 2024, c. 217.