It is not like the other lawyer did not have confidence in the suit. He has to make a compromise based on the best interest of his client. Obviously, settleing outside the court is in his best interest. I assume we are talking about the other driver, not the passenger. It is not clear in your posts. I think you are talking about two different suits you are suing the driver and the passengers in the other car are suing you. As I said in the first post, there are states imposing sanctions if you fail to settle and fail to recover more than you claimed. For example, California civil procedure code section 998 says if you are the plaintiff who refuses to compromise with the offer from the defendant, and if you recover less than you claimed in the suit, then you may be responsible for the entire legal cost and attorney fee from the defendant.
That has nothing to do with the second suit which the passengers are suing you.