Settlement Failure

Once a value date is reached, settlement should occur otherwise it is failed. 

Reasons of failure

• Unmatched settlement instructions at the deadline time imposed by the custodian 
• Insufficient securities/cash in the counter-party's account at the custodian

Repercussions
The repercussions are :
In case when there are insufficient securities from seller's side and the buyer has to wait, the legal ownership of shares moves from the seller to the buyer upon the trade's legal settlement date regardless of when the trade actually settles. Here buyer receives interest till he gets his stocks from seller as a penalty.
In case when seller waits, the then seller faces a loss in interest + principal amount.So buyer has to that interest and that cash in case he is late to pay it earlier. Till he pays principal , buyer has to pay interest a well. 

Prevention
In some markets, regulators impose fines/penalties on parties that cause settlement failure. Trading counteraparties can also implement a number of methods to avoid failures.
Egs.
Seeking acknowledgement from custodians for receipt of settlement instructions,
Prioritizing any actions relating to settlement instructions according to the value date of trades.

For markets that remain open after their value date may be buy-in or sell out procedure.