Here (abridged) are two of the five definitions in the Oxford English Dictionary:

An official agreement intended to resolve a dispute or conflict.  A formal arrangement made between the parties to a lawsuit in order to resolve it, especially out of court.

The action or process of settling an account.

So, like most words, it has differing meanings.  And there are, always, some subtle nuances of meaning. Of course, settlement is the noun for the verb “to settle”.  Here’s some of what the Online Etymology Dictionary (etymology = history of a word’s development) says about that word’s origin:

“come to rest,” Old English setlan “cause to sit, place, put,” from setl “a seat”.

Related: Settling. Compare German siedeln “to settle, colonize.”
Meaning “reconcile” (a quarrel, differences, etc.) perhaps is influenced by Middle English sahtlen “to reconcile,” from Old English saht “reconciliation,” from Old Norse satt “reconciliation.” To settle down “become content” is from 1853; transitive sense from 1520s; as what married couples do in establishing domesticity, from 1718. To settle for “content oneself with” is from 1943.

So that last meaning, to settle for = “content oneself with”, dates only from 1943.

A recent case attracted much interest in the media: Dr Eva Carneiro, the former Chelsea football team doctor, sued the club at an employment tribunal for constructive dismissal.  It was reported that she had refused to settle for the club’s offer of £1.2 million and the case went right up to the beginning of a hearing.  However, there was then a settlement between the club and Dr. Carneiro and the tribunal did not need to proceed further.

​​It was less than astonishing that the tribunal did not go further than a first day of hearing the case: settlement at the last minute is an expected outcome in such cases.  The parties have too much to lose if they fight it all the way through in open court.  There is the cost and, especially in a case like this, the pain of highly unfavourable publicity as each barrister tries to shred their “opponent’s” reputation.

But to what extent does the “settlement” under intense pressure correspond not only to the Oxford Dictionary’s first definition above but also to the sense of reconciliation and settling for = “content oneself with” that is present in the etymology?

Well, it does not correspond very much, I’d say.  Dr Carneiro is quoted as saying to reporters as she left the tribunal venue: ‘It has been an extremely difficult and distressing time for me and my family.’  She looked distressed too – certainly not contented.

This, surely, is where a settlement achieved as a final moment between two contestants facing each other chest to chest on the point of battle differs from a settlement achieved through mediation. Mediation should lead to a settlement that is as legally rigorous as one made “on the steps of the courtroom”, but it should lead far more to that sense of “I am content with this”.  And with far less expenditure of money, time and the precious resource of mental peace.