When I came out of the supermarket, I noticed my car had been hit (dented and scratched at the back tail light and side back passenger panel).  I called the police in my township and filed a complaint/police report.  The person that hit me fled the scene and did not report the incident.  However, another patron witnessed the accident and also called in the incident to the police.  This individual got the tags of the driver that hit me.

The police contacted the driver who hit me. About two days later, I receive a note in the mail from the owner of the vehicle (not the driver that hit me) that he wanted to settle this without going to court or getting our insurace carriers involved.  On 6/15, the owner of the car came to my home to discuss.  I did get an estimate for the car and the cost of getting a rental while my car is in the shop.  He explained to me what happened with regard to the incident and that his brother was the driver, BUT, he did not want to get his brother in trouble so he is taking the heat for this situation.  He also asked did I file a hit and run charge, which I confirmed that I did.  He asked who would be going to court, and I stated that I would.  He then asked if I would drop the charges if he provided me "compensation."  He also stated if we can agree upon the "compensation" and total damages to fix my car that he would have his attorney draw up the papers releasing him of any further compensation for this matter (e.g, we have settled this).

My question is: should I settle this without going to court or through the insurance carriers?  Will there be any legal ramifications on me for dropping a hit and run charge?  Should I get a lawyer to represent me with his lawyer? 

Thanks.

D. Reid