2006 Code of Virginia § 8.01-424 - Approval of compromises on behalf of persons under a disability in suits or actions to which they a...

8.01-424. Approval of compromises on behalf of persons under a disabilityin suits or actions to which they are parties.

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

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

C. A compromise action involving a claim for wrongful death shall be inaccordance with the applicable provisions of 8.01-55. Nothing in thissection shall be construed to affect the provisions of 8.01-76.

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

1. Payment of the sum into court as provided by 8.01-600 or to the generalreceiver of such court;

2. To a duly qualified fiduciary of the person under a disability, after dueinquiry as to the adequacy of the bond of such fiduciary;

3. As provided in 8.01-606; or

4. Where the agreement of settlement provides for payments to be made over aperiod 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 itfinds that all payments which are due to be made are (i) secured by a bondissued by an insurance company authorized to write such bonds in thisCommonwealth or (ii) to be made by an insurance company or companiesauthorized to do business in this Commonwealth and which is rated "A plus"(A+) or better by Best's Insurance Reports. Payments made under thissubdivision totaling not more than $4,000 in any calendar year may be paid inaccordance with 8.01-606. Payments made under this subdivision, totalingmore than $4,000 in any calendar year while the recipient is under adisability, shall be paid to a duly qualified fiduciary after due inquiry asto adequacy of the bond of such fiduciary.

E. Payments made under this section, in the case of damage to the person orproperty of a minor, may be made payable in the discretion of the court tothe parent or guardian of the minor to be held in trust for the benefit ofthe minor. Any such trust shall be subject to court approval and the courtmay provide for the termination of such trust at any time followingattainment of majority which the court deems to be in the best interest ofthe minor. In an order authorizing the trust or additions to an existingtrust the court may order that the trustee thereof be subject to the sameduty to qualify in the clerk's office and to file an inventory and annualaccountings with the commissioner of accounts as would apply to atestamentary trustee.

(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.)