The very short answer is, there is no difference.
Both a verdict and a settlement are essentially the conclusion of a legal matter, such as a personal-injury or intellectual-property case.
The longer answer is that, of course the two are different, or they would have the same name. As both terms refer to a type of resolution of a case, this implies that a case can be resolved in more than one way. Let’s dig into what each of these resolutions mean in their legal context.
A settlement is an agreement reached between the two sides in a case without the matter going to trial, or being reached during the pretrial process but before the judge or jury renders a final decision. Usually, a settlement is reached when it is clear by both parties that one side’s case is considerably weaker than the other’s – the weaker will often offer a settlement to the stronger. The stronger side has the leverage in negotiations and could dictate terms of the settlement, but even the stronger side doesn’t necessarily want to go to trial unless it’s a matter of the stronger side is being railroaded and wants to prove it in court.
A settlement is usually an agreed-upon amount of money or series of actions that essentially show that the weaker side wants to spare a trial and thus may be willing to give up less than he or she might have paid out had the jury or judge reached the same decision on liability. A settlement is clean, can be done behind closed doors and saves time and money on a trial proceeding. It’s as close to a win-win as you get when one side loses.
A verdict is another type of resolution, except it is one where the two parties to the case do not participate in the details. A judge or jury hears all the evidence and testimony and renders a verdict that says one side wins or loses – there is no negotiation. The side that loses is forced to pay whatever amount the court deemed appropriate for the loss perpetrated on the winner, and the two sides can’t discuss the merits of it later.
Often, when a verdict is rendered in lieu of a settlement, the losing party will have to pay out considerably more money than in a settlement – because trials are expensive, and costs for putting on the trial, paying for the judge, the court reporter, the jury members’ per diem, the bailiff and others, can mean even more financial pain.
It is a good idea to consider a settlement first if you are involved in a legal matter, even if you are in a strong position to win. It’s called having grace or mercy to at least be open to an offer by the weaker case. However, if the weaker position isn’t looking to settle, or if the case looks like it could go either way, then going to trial and taking your chances may be the better option, if for no other reason than to establish precedent for future cases of a similar nature.
Don’t settle for a trial, unless the settlement is a trial to achieve.