Settlement in the United States

Resolution of a dispute by mutual agreement. A settlement is reached after negotiation on the merits and brings about a final disposition of the controversy. A settlement is achieved by the parties before a court actually adjudicates the facts in a case. Indeed, a settlement obviates the need for a trial. Settlements do not fully eliminate expenditure of court resources, however. Settlements become more likely after some form of court intervention, such as the holding of a pretrial conference.

Settlement as defined by Nolo’s Encyclopedia of Everyday Law (p. 437-455): An agreement resolving a dispute between the parties in a lawsuit without a trial.

Settlement Definition in the context of the Federal Court System

Parties to a lawsuit resolve their dispute without having a trial. Settlements often involve the payment of compensation by one party in at least partial satisfaction of the other party’s claims, but usually do not include the admission of fault.

Settlement Definition in History

A residence under such circumstances as to entitle a person to support or assistance in case of becoming a pauper. It is obtained in various ways, to wit: By birth; by the legal settlement of the father, in the case of minor children; by marriage; by continued ‘ residence; by the payment of requisite taxes; by the lawful exercise of a public office; by hiring and service for a specified time; by serving an apprenticeship; and perhaps some others, which depend upon the local statutes of the different states. (…) In Contracts. A determination by agreement. 113 Iowa 211. An agreement by which two or more persons who have dealings together so far arrange their accounts as to ascertain the balance due from one to the other; payment in full. The conveyance of an estate for the benefit of some person or persons. See “Marriage Settlement.” (1)

Analysis and Relevance

Parties pursue settlements in cases because they wish to reduce the risk that comes with a trial. Settlements typically reflect a compromise on at least one of the key issues. Such compromises are attempts by both sides to hedge against losing completely at trial. Settlements produce certainty of outcome for both sides. The likelihood of resolving a case by settlement increases substantially as the case comes closer to the trial date and the parties develop greater apprehension about success in the trial. A settlement is also the final disposition of a dispute. Appeals are virtually never taken from settlements. The settlement reduces anxiety and eliminates the costs associated with a trial. The courts are supportive of parties settling disputes because settlements free trial time for other cases. Since there is always a substantial backlog of civil cases, courts have a strong interest in having cases resolved without trial. It is for this same reason that alternative dispute resolution has become so widely used. The criminal counterpart to settlement is the plea bargain or plea agreement. While the processes may vary somewhat, criminal defendants and prosecutors negotiate plea agreements for the same reasons civil litigants negotiate—greater control of the outcome.

Notes and References

  1. Definition of Settlement from the American Law Dictionary, 1991, California


1. This definition of Settlement is based on the The Cyclopedic Law Dictionary

See Also

Delay (Civil Process) Plea Bargaining (Civil Process)

Settlement (Bank Collections)

This section introduces, discusses and describes the basics of settlement. Then, cross references and a brief overview about Bank Collections is provided. Finally, the subject of Commercial Law in relation with settlement is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.

Finding the law: Settlement in the U.S. Code

A collection of general and permanent laws relating to settlement, passed by the United States Congress, are organized by subject matter arrangements in the United States Code (U.S.C.; this label examines settlement topics), to make them easy to use (usually, organized by legal areas into Titles, Chapters and Sections). The platform provides introductory material to the U.S. Code, and cross references to case law. View the U.S. Code’s table of contents here.