A settlement is generally an agreement between two parties (disputing parties). In law, a settlement means an end of dispute between two parties over a legal issue. A lawsuit settlement is when one possible common result that is being reached between parties suing each other in civil proceedings. A settlement of the lawsuit defines a legal action that is enforced by the governing body.

There are two sorts of persons in a lawsuit a plaintiff and a defendant. They can make a settlement without a trial. This sort of settlement can be made by a payment of a certain amount of money. In this settlement, the defendant and the plaintiff just have to file a notice for the case to be dismissed. Majority of the settlements are made out of court to avoid the fees involved in lawsuit and the time that is wasted and to avoid the headache of finding the witnesses. In case of criminal cases, the closet parallel to a settlement is a plea bargain, although this differs in several important respects, particularly the ability of the presiding judge to reject the terms and conditions of a settlement.

Lawsuit settlements can take actions during or before the premature stage of a trial. In case when multiple defendants are involved then it becomes an approval of the court for the settlement. Lawsuit comes into picture when the plaintiff is sure that the defendant has caused serious damage to him or his goodwill. The case may or may not go in the court. If the defendant feels that the plaintiff is short of evidences then the defendant goes for a settlement in the court else if he feels that he is weak then it goes for a settlement outside the court.

Another reason for which both the parties might not want to go for lawsuit proceeding is that the proceedings are very unpleasant and might cause further discomfort to both the parties. The settlement may be reached between the parties without going to the court. This happens because the lawyers of both the parties keep on talking and negotiating to the terms. This situation might arise when the parties feel that the lawsuit process will be very complicated whereas there actually are not many complicacies in it.

In case of class actions lawsuit process can become complicated. The lawyers have the option for representing multiple plaintiffs. The court would then listen to the proceedings given by them and take decisions keeping them all in mind as equals. In a similar way, cases where there are multiple defendants, the court has to bring them all under one roof. The problem arises when some of them agree to step down while the others don't. Whichever be the case, both sides should act sensibly and logically when dealing with each other. The weaker side should always try to solve matters and not complicate it as they are bound to lose eventually. The more difficulties they create, the worse would be the result.