A more thorough explanation:

Definition: Settlement credit is a term used in civil procedure to describe a court's reduction of the amount of a jury verdict or the effect of the verdict on nonsettling defendants. This reduction is made to account for any settlement funds that the plaintiff has received from former defendants or other responsible parties.

Example: Let's say that a plaintiff sues three defendants for damages resulting from a car accident. The jury awards the plaintiff $100,000 in damages. However, one of the defendants settles with the plaintiff for $50,000 before the verdict is entered. In this case, the court may reduce the verdict by the amount of the settlement, meaning that the plaintiff would only receive $50,000 from the remaining two defendants.

Explanation: This example illustrates how settlement credit works in practice. The court reduces the amount of the verdict to account for the settlement funds that the plaintiff has already received. This ensures that the plaintiff does not receive a windfall by recovering more than the actual damages suffered. It also prevents the remaining defendants from being unfairly penalized for the actions of a settling defendant.