Anthony Madigan, 47, a former care worker from Grangetown, Cardiff, is paralysed from the neck down and will never work again.
He is suing Daniel Cooper, 11, from Nuneaton, Warwickshire, for negligence and his parents Kevin and Carol for failing adequately to supervise him.
Children are rarely sued because few have the means to satisfy a judgment against them. But Daniel is covered by the family's travel insurance, which provides cover of £2m for harm to a third party.
Mr Madigan's solicitor, Costas Andrea, said: "It's a good advert for taking out travel insurance because you never know what's going to happen."
The claim was still being quantified, but his "best guess" was that it was worth between £1m and 2m.
"Anthony was a completely innocent victim and is going to suffer for the rest of his life," he said.
Mr Madigan had been standing in the pool's shallow end on the first day of a week's holiday with three friends at the Palma Bay Club hotel in Arenal, Majorca, when the accident happened in August 1999.
He told BBC Radio Wales: "I was in the pool less than a minute then all of a sudden I felt an impact on the neck and the next thing I realised I was face down in a pool drowning.
"It transpired a child was thrown on to my neck and as the impact went on my neck it shattered every nerve in my body. I was totally paralysed.
"A little girl set the alarm off and I got dragged out of the pool. They thought I was clinically dead at the poolside."
Mr Andrea said it was unclear whether Daniel had jumped or been pushed.
The boy's parents claimed he was pushed and had brought Airtours into the lawsuit, arguing that the package holiday group was liable.
"The family are saying that the hotel entertainers were encouraging throwing people in the pool," said Mr Costas. "It will all come out at the trial."
The case was expected to go to the high court in London in July if not settled earlier. "I'm hoping we won't have to go all the way to trial. but you never know."
An Airtours spokeswoman said: "We can confirm legal proceedings are in place but cannot comment any further."