A judge can in fact do that, by giving (to both sides) about what evidence is going to be admissible, and what lines of questioning are going to be considered in-bounds. Both sides do their pre-trial maneuvering, and then they can make an estimation of how the trial is likely to go. Then both sides have a pretty good idea what the landscape really is (and they know that the other side knows it to). Negotiation often happens at that point.

The judge didn't force the settlement - just let people on both sides figure out what the range of likely outcomes was. Then both sides chose to give up their best-case outcome in order to avoid their worst-case outcome.