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In what US state did this occur? This sounds like a criminal case and not a family court case, is that correct?
This is what we call a cross complaint and generally, if both parties show up with lawyers on the court date and the lawyers tell the prosecutor that neither party wants to proceed, the prosecutor is usually happy enough to dismiss charges and the judge will go along with it. The important thing is that it's coordinated so that both parties are there at the same time and drop at the same time, because if each case is heard on two different dates or before two different judges, one party or the other could rethink the situation and proceed after the other party has dropped.
They don't need lawyers, except that it's more efficient, since many prosecutors won't negotiate with an unrepresented defendant.
Not exactly. The case does not belong to either of them Only the prosecutor can dismiss the case. The prosecutor has to be willing to let them both drop. In my experience, with a cross-complaint and no serious injuries, the prosecutor will generally agree to dismiss the cases, but as I've said, sometimes prosecutors refuse to negotiate with unrepresented defendants except on the record before the judge.