A minor, a child under the age of 18, may only settle a personal injury case out of court by using rules promulgated by the State Legislature. It is called “compromise of a minor’s claim.” Basically, it is intended to protect the rights of minor children.
The idea is to protect the child’s damages award (money) from unscrupulous lawyers, family, and any other potential predator. Typically, the court will appoint a guardian ad litem, or conservator.
Often the court will reduce the attorney’s fees amount of any litigated case, and order a bank trust account be put in place till the minor reaches the age of majority.
There is a similar process in place for elders and incompetents in California courts. (Go here for forms and additional rules.)
Here are some additional answers to frequently asked questions: