Settlement
An agreement between the parties in a lawsuit to resolve the case without going to trial.
A settlement is when both sides of a legal dispute agree to resolve the case on their own terms rather than having a judge or jury decide the outcome. In a settlement, the parties negotiate terms — often involving a payment of money — and put the agreement in writing. Once both sides sign, the case is typically dismissed.
Most civil cases in Minnesota settle before trial. Minnesota courts encourage settlement through alternative dispute resolution (ADR) methods such as mediation. Settlements give both parties more control over the outcome and avoid the uncertainty, cost, and time of a trial. Settlement terms can be creative and flexible in ways that a court judgment cannot.
Why it matters: Settling a case is usually faster and less expensive than going to trial. However, a settlement is final — once you agree and sign, you generally cannot reopen the case. Understanding the terms before you sign is critical.
Example: A person injured in a car accident negotiates with the other driver’s insurance company and agrees to accept $25,000 to settle the claim. In exchange, the injured person signs a release giving up the right to sue over the accident.
Civil lawsuits, personal injury cases, divorce cases, insurance claims, contract disputes