I'm not an attorney (though I am currently preparing for the bar exam!), but you should definitely contact one.

I'm wondering if you could counterclaim their suit claiming that the mother was negligent for her lack of supervision of her child as a defense to their claim. Generally parents aren't held liable for the actions of their children but in this case she knew her son had trespassed onto your property and was engaging in dangerous activity when the event occurred. When you know that a trespasser is on your property you have a duty to warn them of any dangers on your property, and it sounds like your wife did that. You may also have a suit for the damage to your vehicle that the boy created or request an injunction to have the kid stop coming on your property.

Idk, just some thoughts. Again, I am not an attorney and I'm in no way giving legal advice, but you should definitely talk to an attorney. Also, don't engage with your neighbor again and the idea about security cameras on the property as a great one.