settlement

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Settlement

The act of adjusting or determining the dealings or disputes between persons without pursuing the matter through a trial.

In civil lawsuits, settlement is an alternative to pursuing litigation through trial. Typically, it occurs when the defendant agrees to some or all of the plaintiff's claims and decides not to fight the matter in court. Usually, a settlement requires the defendant to pay the plaintiff some monetary amount. Popularly called settling out of court, a settlement agreement ends the litigation. Settlement is a popular option for several reasons, but a large number of cases are settled simply because defendants want to avoid the high cost of litigation. Settlement may occur before or during the early stages of a trial. In fact, simple settlements regularly take place before a lawsuit is even filed. In complex litigation, especially Class Action suits or cases involving multiple defendants, a settlement requires court approval.

Civil lawsuits originate when a claimant decides that another party has caused him or her injury and files suit. The plaintiff seeks to recover damages from the defendant. The defendant's attorney will evaluate the plaintiff's claim. If the plaintiff has a strong case and the attorney believes defendant is likely to lose, the attorney may recommend that the defendant settle the case. By settling, the defendant avoids the financial cost of litigating the case. Trials are often extremely expensive because of the amount of time required by attorneys, and even alternatives to trials, such as mediation and Arbitration, can be costly. In deciding whether to settle a claim, attorneys act as intermediaries. The parties to the suit must decide whether to offer, accept, or decline a settlement.

The cost of litigation is only one factor that encourages settlement. Both plaintiffs and defendants are often motivated to settle for other reasons. For one thing litigation is frequently unpleasant. The process of discovery—in which both sides solicit information from each other—can cause embarrassment because considerable personal and financial information must be released. Litigation can also have a harmful impact on the public reputation of the parties. Employers, for example, sometimes settle Sexual Harassment claims in order to avoid unwanted media exposure or damage to employee morale.

Like litigation itself, settlement is a process. Generally, the easiest time to settle a dispute is before litigation begins, but many opportunities for settlement present themselves. As litigation advances toward trial, attorneys for both sides communicate with each other and with the court and gauge the relative strength of their cases. If either of the parties believes he is unlikely to prevail, he is likely to offer a settlement to the other party.

Litigation ends when a settlement is reached. The plaintiff typically agrees to forgo any future litigation against the defendant, and the defendant agrees to pay the plaintiff some monetary amount. Additionally, settlements can require the defendant to change a policy or stop some form of behavior.

Often, the exact terms of settlements are not disclosed publicly, particularly in high-profile cases where the defendant is seeking to protect a public reputation. In high-profile cases, settlements are often followed by a public statement by the defendant. It is not unusual for a large company to settle with a plaintiff for an undisclosed amount and then to issue a statement saying that the company did nothing wrong.

In some forms of litigation, settlement is more complex. In class actions, for example, attorneys represent a large group of plaintiffs, known as the class, who typically seek damages from a company or organization. Courts review the terms of a class action settlement for fairness. Complexities also arise in cases involving multiple defendants. In particular, when only some of the defendants agree to settle, the court must determine the share of liability that accrues to those defendants who choose to pursue litigation.

Further readings

Practising Law Institute (PLI). 1996. Class Action Settlements, by Roberta D. Liebenberg, Ralph G. Wellington, and Sherrie R. Savett. Corporate Law and Practice Course Handbook series: Financial Services Litigation, PLI order no. B4-7153.

——. 1996. Settlement, by Norma Polizzi. Litigation and Administrative Practice Course Handbook Series: Litigation, PLI order no. H4-5247.

——. 1995. Damages and Settlements in Sex Harassment Cases, by Richard G. Moon. Litigation and Administrative Practice Course Handbook Series: Litigation, PLI order no. H4-5213.

settlement

n. the resolution of a lawsuit (or of a legal dispute prior to filing a complaint or petition) without going forward to a final court judgment. Most settlements are achieved by negotiation in which the attorneys (and sometimes an insurance adjuster with authority to pay a settlement amount on behalf of the company's insured defendant) and the parties agree to terms of settlement. Many states require a settlement conference" a few weeks before trial in an effort to achieve settlement with a judge or assigned attorneys to facilitate the process. A settlement is sometimes reached based upon a final offer just prior to trial (proverbially "on the courthouse steps") or even after trial has begun. A settlement reached just before trial or after a trial or hearing has begun is often "read into the record" and approved by the court so that it can be enforced as a judgment if the terms of the settlement are not complied with. Most lawsuits result in settlement. (See: settle)

settlement

noun accommodation, adjustment, agreement, arrangement, arrangement of difficulties, compositio, composure of differences, composure of doubts, compromise, conciliation, concordat, constitutio, contract, determination by agreement, discharge, final terms, negotiation, pact, pactum, payment, reconciliation, release, satisfaction, set of terms, terms, understanding
Associated concepts: deed of settlement, final settlement, settlement of a case, voluntary settlement
See also: accommodation, accord, accordance, adjustment, agreement, alimony, alluvion, arbitration, arrangement, bargain, choice, compact, compensation, composition, compromise, concession, conciliation, conclusion, consequence, consideration, contract, decision, declination, denouement, descent, determination, discharge, disposition, dower, expiation, habitation, honorarium, indemnification, nollo contendere, outcome, pact, pay, payment, recompense, reconciliation, refund, remuneration, reparation, restitution, satisfaction, treaty, understanding

settlement

1 an instrument by which property is limited to persons in succession or is to vest on the occurrence of specified contingencies. Settlements in England or Scotland are invariably made through the medium of the trust. In English law it is not competent for a settlement, whether of realty or personalty, to be made otherwise. Technically, in other jurisdictions (e.g. Australia and New Zealand and, indeed, Scotland) it is possible to create a simple settlement without a trust but, in practice, such settlements are rarely, if ever, encountered.

In English law, settlements of land developed to a high degree of sophistication. In the 1925 reforms it was provided that land might be settled either by way of strict settlement or by way of trust for sale, but not otherwise.

2 in Scottish conveyancing practice, the day when the title is exchanged for the money.
3 settlement in the sense of living in the UK gives a person a right to permanent residence in the UK provided he continues living here; such a person is subject to deportation if he commits a serious crime or if his presence is no longer conducive to the public good. Having a right of settlement may lead to the right to register or to be naturalized as a British citizen. Once settled, a person may call for members of his family and other dependants to join him in the UK provided their maintenance and accommodation does not require recourse to public funds.
4 resolution of a legal dispute out of court.

SETTLEMENT, domicil. The right which a person has of being considered as resident of a particular place.
     2. It is obtained in various ways, to wit: 1. By birth. 2. By the legal settlement of the father, in the case of minor children. 3. By marriage. 4. By continued residence. 5. By the payment of requisite taxes. 6. By the lawful exercise of a public office. 7. By hiring and service for a year. 8. By serving an apprenticeship; and perhaps some others which depend upon the local statutes of the different states. Vide 1 Bl. Com. 363; 1 Dougl. 9; 2 Watts' Rep. 44, 342; 2 Penna. R. 432; 5 Serg. & Rawle, 417; 2 Yeates' R. 51; 5 Binn. R. 81; 3 Binn. R.. 22; 6 Serg. & Rawle, 103, 565; 10 Serg. & Rawle, 179. Vide Domicil.

SETTLEMENT, contracts. The conveyance of an estate, for the benefit of some person or persons.
     2. It is usually made on the prospect of marriage for the benefit of the married pair, or one of them, or for the benefit of some other persons, as their children. Such settlements vest the property in trustees upon specified terms, usually for the benefit of the husband and wife during their joint lives, and then for the benefit of the survivor for life, and afterwards for the benefit of children. Ante-nuptial agreements of this kind will be enforced in equity by a specific performance of them, provided they are fair and valid, and the intention of the parties is consistent with the principles and policy of law. Settlements after marriage, if made in pursuance of an agreement in writing entered into prior to the marriage, are valid, both against creditors and purchasers.
     4. When made without consideration, after marriage, and the property of the husband is settled upon his wife and children, the settlement will be valid against subsequent creditors, if, at the time of the settlement being made, he was not indebted; but, if he was then indebted, it will be void as to the creditors existing at the time of the settlement; 3 John. Ch. R. 481; 8 Wheat. R. 229; unless in cases where the husband received a fair consideration in value of the thing settled, so as to repel the presumption of fraud. 2 Ves. 16 10 Ves. 139. Vide 1 Madd. Ch. 459; 1 Chit. Pr. 57; 2 Kent, Com. 145; 2 Supp. to Ves. jr. 80, 375; Rob. Fr. Conv. 188. See Atherl. on Mar. passim.
     5. The term settlement is also applied to 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; and settlement sometimes signifies a payment in full.

References in classic literature ?
These mountains are in the wilderness, as we pass from the old settlements in Virginia to Kentucke, are ranged in a S.
Smyth, a respectable woman from the settlement in Canada, whither they were fleeing, being fortunately about crossing the lake to return thither, had consented to appear as the aunt of little Harry; and, in order to attach him to her, he had been allowed to remain, the two last days, under her sole charge; and an extra amount of petting, jointed to an indefinite amount of seed-cakes and candy, had cemented a very close attachment on the part of the young gentleman.
The fact is, where you strike one man in the English settlements that you can understand, you wade through awful swarms that talk something you can't make head nor tail of.
It only contained these words: "Give yourself no trouble about settlements.
There is nothing to be provided on your part but settlements and your trousseau.
It is your further happiness to behold, in those eminent characters, who were most conspicuous in accomplishing the settlement of your country, men upon whose virtue you can dwell with honest exultation.
There is an admirable foundation for a philosophic romance in the curious history of the early settlement of Mount Wollaston, or Merry Mount.
The consequence is that the Rocky Mountains and the ulterior regions, from the Russian possessions in the north down to the Spanish settlements of California, have been traversed and ransacked in every direction by bands of hunters and Indian traders; so that there is scarcely a mountain pass, or defile, that is not known and threaded in their restless migrations, nor a nameless stream that is not haunted by the lonely trapper.
If there are various ways of quieting one's conscience, in the way of marriage settlements, so are there various modes of appeasing our sense of pride.
It was his opinion, also, that a settlement on this extremity of America would disclose new sources of trade, promote many useful discoveries, and open a more direct communication with China and the English settlements in the East Indies, than that by the Cape of Good Hope or the Straits of Magellan.
It was now too late to require the assistance of Roger Malvin's friends in performing his long-deferred sepulture; and superstitious fears, of which none were more susceptible than the people of the outward settlements, forbade Reuben to go alone.
Ferguson and his brave companions, as vouched for by undeniable testimony; and they found themselves among friends in the midst of most hospitable tribes, whose relations with the French settlements are frequent and amicable.