What is a settlement in legal terms?

A settlement is fundamentally defined as an agreement reached by the parties involved in a dispute to resolve their issues without the need for formal litigation or going to trial. The primary advantage of a settlement is that it allows both parties to come to a mutually accepted resolution, which can save time, legal fees, and the uncertainty of trial outcomes. Settlements can occur at any stage of a legal dispute, from before a lawsuit is filed to during the trial process, and often involve negotiations to reach a compromise that satisfies both parties.

In contrast, the other choices describe distinct legal concepts. A type of legal defense strategy refers to the various tactics that a lawyer might employ to defend a client in court, which is unrelated to the concept of reaching an agreement outside of court. A document filed in criminal court typically refers to legal filings such as charges or motions submitted to the court for consideration, rather than a resolution between disputing parties. Financial compensation provided by courts may occur as a result of a trial verdict, but does not encompass the broader definition of a settlement, which is characterized by the agreement of the involved parties.