Once all the facts of a case are known, the parties can begin negotiating to see if a settlement is possible. While this can happen at any stage of the litigation, it most generally happens after examinations for discovery.
Negotiations are conducted on a without prejudice basis. This means that anything a party says during negotiations cannot be used against them at trial. This allows the parties to have a frank discussion about the merits and weaknesses of the case.
If the parties or their lawyers are unable to reach a negotiated settlement on their own, they can enlist the help of a mediator to help them bridge the divide.
If the parties are able to reach a negotiated or mediated settlement, the party paying or giving up something (usually the defendant) will require the other party (usually the plaintiff) to sign a release essentially stating that they won’t sue that person again based on the same subject matter. Another document called a consent dismissal order may also be filed with the court registry depending on where in the litigation the case settles.
Parties who are unable to settle their disputes will proceed to trial.