Settlement (litigation)

A settlement is like making a deal with someone. When people have a disagreement or problem they might go to court to have a judge decide who is right and who is wrong. This is called litigation. However, sometimes instead of going to court, the people involved in the problem come up with a solution that makes everyone happy. This is called a settlement.

Let's say you and your friend are fighting over a toy. You could go to your parents and ask them to be the judge and decide who gets the toy. Or, you and your friend could make a deal and take turns playing with the toy. That would be a settlement.

When adults have a disagreement over something important like money or property, they might hire lawyers to help them. Instead of going to court, they might work together outside of court to come up with a settlement. The lawyers would help them make the deal and write it down in a legal agreement.

Settlements can be a good option because they are usually less expensive and less stressful than going to court. Plus, everyone involved gets to have a say in the solution.