A legal settlement is a formal and legally binding agreement between two or more parties that ends a dispute.
In the case of a personal injury claim, the plaintiff agrees to certain conditions and that leads to the resolution of the dispute. A personal injury settlement is reached when the plaintiff agrees to drop the lawsuit and the defendant agrees to the terms that include the amount of compensation.
While most legal settlements occur after the plaintiff files a lawsuit, your personal injury lawyer might settle your claim before you file a civil lawsuit. Regardless of when a legal settlement takes place, it typically ends with a payout to the plaintiff that covers most, if not all of the costs that are associated with a personal injury incident.