§ 101.105.Settlement

The settlement authority, and who exercises it depends on the defendant.

A cause of action may be settled and compromised by the governmental unit if — in a case involving the state, the governor determines, or in other cases the governing body of the governmental unit determines — that the compromise is in the best interests of the governmental unit.

The approval requirement is a real constraint on how these cases settle. A city's settlement is authorised by its council, typically in a public meeting; a county's by its commissioners court. Settlement is therefore slower than in private litigation and is a matter of public record.

The standard is the governmental unit's own interests, not the fairness of the compromise to the claimant. The decision-maker is asking whether settling serves the public body.

Subsection (b) is the significant exception: approval is not required if the governmental unit has acquired insurance under this chapter.

That follows from the insurance section, which lets a policy relinquish to the insurer the right to investigate, defend, compromise, and settle. An insurer that has taken the defence settles on its own judgment, and requiring a council vote would be inconsistent with the bargain the policy struck.

Read with the evidence section, an insured governmental unit's insurance is undiscoverable, unmentionable at trial, and controls the settlement — present throughout the case and invisible in it.