KembaraXtra - Legal Terms - Settlement of Action

A settlement of action is the voluntary resolution of civil litigation by agreement between the parties before the court gives final judgment. Rather than continuing with the trial, the parties negotiate terms that dispose of the dispute, thereby bringing the proceedings to an agreed conclusion. Settlement may occur at any stage of litigation, whether before proceedings are commenced, during case management, immediately before trial, or even while the trial is underway.

The terms of settlement commonly include payment of compensation, performance of contractual obligations, withdrawal of allegations, confidentiality provisions, or agreements concerning legal costs. The settlement may resolve all issues in dispute or only certain aspects of the litigation. Once agreed, it creates binding contractual obligations between the parties.

A settlement may be recorded formally by the court through a consent order, which gives the agreement the status of a court order and makes it enforceable as such. In some cases, particularly where continuing supervision may be required, the settlement is embodied in a Tomlin order, which stays the proceedings while preserving the settlement terms in a confidential schedule.

Where proceedings are no longer required following settlement, the claimant may file a notice of discontinuance under Part 38 of the Civil Procedure Rules, thereby formally bringing the claim to an end. Alternatively, the consent order itself may dispose of the proceedings entirely.

Settlement of actions is strongly encouraged by the courts because it reduces litigation costs, conserves judicial resources, and enables parties to reach practical commercial solutions that a court might not be able to impose. Modern civil procedure therefore promotes negotiation, mediation, and alternative dispute resolution wherever appropriate.