Settlement

A settlement is an agreement between the parties of a lawsuit or claim that resolves the legal dispute. It usually involves the payment of a specified amount to the plaintiff to resolve the claim without a decision on the merits of the case. A legal release from the plaintiff regarding any future defendant liability from the incident is obtained in exchange for the payment. The release usually includes a statement that the settlement is not an admission of any fault.

[Page 510]Settlement may be more desirable than proceeding with litigation for a number of reasons. It can limit defense costs, avoid uncertainty by establishing a fixed amount, reduce the stress of litigation, and avoid unfavorable publicity. The plaintiff avoids delay in obtaining compensation for damages.

The settlement process initially begins with the plaintiff's attorney demanding a monetary figure for damages and the defendant's attorney responding with a denial, acceptance, or counteroffer. The judge may order formal mediation, which involves an impartial third party such as another judge who helps the parties come to an agreement. The third party helps both sides see each other's view and realistically addresses the merits of the case.