Jurisdiction(s):
United Kingdom

Key definition

Settlement definition

What does Settlement mean? In financial markets practice, settlement is the completion of a securities trade by delivering the securities to the buyer and paying the price to the seller, usually on a scheduled date after the trade (for example, T+2) and commonly on a delivery versus payment (DvP) basis. It is a descriptive market term rather than a single statutory definition, but is governed by legislation and market rules (including the UK onshored CSDR regime and the EU CSDR in Ireland, the Uncertificated Securities Regulations, the Settlement Finality Regulations, and central securities depository and CCP rulebooks). Key features include trade matching/affirmation, allocation of settlement...

Settlement agreements: preventing re‑litigation, releases, carve‑outs, third‑party effects, contribution claims, fraud, rectification and reserved judgments (England and Wales)

Published by a LexisNexis Dispute Resolution expert

Practice notes

This Practice Note examines the impact of a settlement agreement on ongoing litigation, whether settlements can bar further litigation (and the exceptions to that), safeguarding future claims by carving them out of the settlement agreement, when a settlement can bind third parties, passing on settlements to other parties, and when a settlement agreement can release fraud-based claims. For guidance on interpreting settlement agreements, see Practice Note: Settlement agreements—interpretation.

The estoppel and release

In the setting of proposed or ongoing proceedings, the release clause in a settlement agreement operates to discharge one party from liability arising out of the subject matter of the dispute. There are numerous formulations of a release clause, some markedly longer than others, and many achieving the same effect with different wording in practice. In essence it covers:

a full and final resolution
an agreement not to sue
a waiver and release of the claim (and similar claims)

For further guidance, including sample clauses, see Practice Note: Settling disputes—drafting the settlement agreement—the estoppel (the release of claims). For guidance on ensuring that disposal of issued proceedings is properly addressed when finalising your settlement agreement, see Practice Note: Settling disputes—drafting the settlement agreement—Drafting settlement agreements—disposing of the proceedings...

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Web page updated on 21/05/2026

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