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In law, a settlement is a resolution between disputing parties about a legal case, reached either before or after court action begins. A collective settlement is a settlement of multiple similar legal cases. The term also has other meanings in the context of law.
Structured settlement A structured settlement is a negotiated financial or insurance arrangement through which a claimant agrees to resolve a personal injury tort claim by receiving part or all of a settlement in the form of periodic payments on an agreed schedule, ...
s provide for future periodic payments, instead of a one time cash payment.


Basis

A settlement, as well as dealing with the dispute between the parties is a contract between those parties, and is one possible (and common) result when parties sue (or contemplate so doing) each other in civil
proceedings In academia and librarianship, conference proceedings is a collection of academic papers published in the context of an academic conference or workshop. Conference proceedings typically contain the contributions made by researchers at the confer ...
. The
plaintiff A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issue judgment in favor of t ...
s and defendants identified in the
lawsuit - A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil act ...
can end the dispute between themselves without a
trial In law, a trial is a coming together of parties to a dispute, to present information (in the form of evidence) in a tribunal, a formal setting with the authority to adjudicate claims or disputes. One form of tribunal is a court. The tribun ...
. The contract is based upon the bargain that a party forgoes its ability to sue (if it has not sued already), or to continue with the claim (if the plaintiff has sued), in return for the certainty written into the settlement. The courts will enforce the settlement. If it is breached, the party in default could be sued for breach of that contract. In some jurisdictions, the party in default could also face the original action being restored. The settlement of the lawsuit defines legal requirements of the parties and is often put in force by an order of the court after a joint stipulation by the parties. In other situations (as where the claims have been satisfied by the payment of a certain sum of money), the plaintiff and defendant can simply file a notice that the case has been dismissed. The majority of cases are decided by a settlement. Both sides (regardless of relative monetary resources) often have a strong incentive to settle to avoid the costs (such as legal fees, finding expert witnesses, etc.), the time and the stress associated with a trial, particularly where a trial by jury is available. Generally, one side or the other will make a settlement offer early in litigation. The parties may hold (and indeed, the court may require) a settlement conference, at which they attempt to reach such a settlement. In controversial cases, it may be written into a settlement that both sides keep its contents and all other information relevant to the case confidential or that one of the parties (usually the one being sued) does not, by agreeing to the settlement, admit to any fault or wrongdoing in the underlying issue. A "global settlement" is one employed where suits have been filed or charges brought in multiple jurisdictions and is defined as "a legal agreement that addresses or compromises both civil claims and criminal charges against a corporation or other large entity". Examples of a global settlement include the Tobacco Master Settlement Agreement between the attorneys general of 46 U.S. states and the four major U.S. tobacco companies in 1999. Another example is within the Global Analyst Research Settlements.


Specific jurisdictions


United States

Usually, lawsuits end in a settlement, with an empirical analysis finding that less than 2% of cases end with a trial, 90% of
tort A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...
s settle, and around 50% of other civil cases settle. In American law, settlement agreements are normally private
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
s, not court orders, except for consent decrees, which are relatively uncommon in the United States.


Negotiations

Under Federal Rule of Evidence 408, settlement negotiations cannot usually be introduced as evidence at trial, and many state rules of evidence have similar rules modeled after it.


Confidentiality

Most settlements are confidential. In these cases, the court order may refer to another document which is not disclosed, but which may be revealed to prove a breach of the settlement. Confidentiality is not possible in
class action A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
cases in the United States, where all settlements are subject to approval by the court pursuant to Rule 23 of the Federal Rules of Civil Procedure and counterpart rules adopted in most states. In some cases, confidential settlements are requested in discovery. Federal courts can issue protective orders preventing the release, but the party seeking to prevent disclosure must show that harm or prejudice would result from the disclosure. In specific states such as California, however the burden is on the party seeking release of the confidential settlement.


Limitations

The confidentiality of settlements is controversial as it allows damaging actions to remain secret, as occurred in the Catholic sexual abuse scandal. In response, some states have passed laws which limit confidentiality. For example, in 1990 Florida passed a 'Sunshine in Litigation' law which limits confidentiality from concealing public hazards. Washington state, Texas, Arkansas, and Louisiana have laws limiting confidentiality as well, although judicial interpretation has weakened the application of these types of laws. In the U.S. Congress, a similar federal Sunshine in Litigation Act has been proposed but not passed in 2009, 2011, 2014, and 2015. Confidentiality agreements which keep secrets from regulators about violations is probably unenforceable, but a specific carveout granting regulators access is usually not included.


England and Wales

In
England and Wales England and Wales () is one of the three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. The substantive law of the jurisdiction is En ...
, if the matter is already before the courts, except in a case where the claim is to be dismissed outright and the Claimant agrees to pay the Defendant's costs, the matter is usually dealt with by a consent order, signed by the legal representatives of both parties and approved by the judge. To get around the issue of confidentiality referred to above, a standard procedure consent order, known as a
Tomlin Order A Tomlin order is a court order in the English civil justice system under which a court action is stayed on terms that have been agreed in advance between the parties and are included in a schedule to the order. As such, it is a form of consent o ...
is entered into. The order itself contains an agreement that the claim is stayed and no further action can be taken in court (except for referring a dispute in the implementation of the order to court, which is allowed). The order also deals with payment of costs, and payments of money out of court if any money is held by the court (as these are matters which must be dealt with by Court Order). However, the actual terms of the settlement are dealt with in a 'schedule' to the order, which can remain confidential. Breach of the schedule can be dealt with as breach of contract, or breach of the consent order.


Israel

In Israel, which is a common law jurisdiction, settlements almost always are submitted to the court, for two reasons: (a) only by submitting the settlement to the court can the litigants control whether the court will order one or more parties to pay costs, and (b) the plaintiff (claimant) usually prefers for the settlement to be given the effect of a judgment.


See also

*
Coercion Coercion () is compelling a party to act in an involuntary manner by the use of threats, including threats to use force against a party. It involves a set of forceful actions which violate the free will of an individual in order to induce a des ...
*
Pierringer release A Pierringer release or Pierringer Agreement is a type of settlement agreement. In law, a settlement is a resolution between disputing parties about a legal case that is reached either before or after court action begins. The origin of the case i ...
*
Strike suit A strike suit is a lawsuit of questionable merit brought by a single person or group of people with the purpose of gaining a private settlement before going to court that would be less than the cost of the defendant's legal costs. Such suits frequ ...


References


External links

*Uri Weiss
The Regressive Effect of Legal Uncertainty
{{DEFAULTSORT:Settlement (Litigation) Civil law (common law) Civil procedure