In a legal context, what does "settlement" refer to?

In a legal context, "settlement" specifically refers to an agreement reached between parties to resolve a dispute without proceeding to a trial. This process is often preferable for both parties as it can save time, reduce expenses, and provide a more predictable outcome than a trial might offer. Settlements can occur at various stages of litigation and typically involve negotiation, where both parties come to a compromise that satisfies their respective interests.

The nature of settlements allows parties to maintain control over the resolution of their dispute, rather than leaving the decision in the hands of a judge or jury, which is the case in a trial. In the settlement process, both parties may agree on the terms of compensation or actions to be taken to resolve the issue at hand. Ultimately, a settlement is designed to achieve a mutual agreement that avoids the uncertainty of court proceedings.