Consolidation settlement analysis is an essential part of the design process for suction caissons. However it is a complex task since soil volume important for settlement analyses is directly affected by the installation process. Consolidation settlements have been found to be the critical design criterion in several subsea developments, adequate and correct analysis is therefore vital. The FEM code PLAXIS has been used to evaluate the reconsolidation process after completed installation of the suction caisson. Emphasize has been placed on studying the shear strength increase with time along the skirt walls. During consolidation dissipation of excess pore pressures result in higher effective stresses. Consequently the modeled undrained shear strength increases. However the increase is small compared to the expected increase in shear strength due to the set-up phenomenon. To account for the deviation an adjusted simulation procedure incorporating incremental increase of friction angle in the interface zones has been suggested. The results were found to be reasonable with respect to final consolidation settlements and development of mobilized shear strength with time.Adequate modeling of the changes in the interface zones adjacent to the caisson walls during consolidation is vital for correct prediction of long term settlements. Modeled undrained shear strength with time have huge impact on the analysis results due to different mobilization of the surrounding soil. Appropriate evaluation of soil structure interaction is essential to assess the reliability of the analysis. Taking into account changes of the soil volume important for settlement analysis is also vital. A simple physical model test has been performed. Due to delays and relatively short test period the results were inconclusive. However the importance of considering short term set-up effects has been underlined by recorded resistance and physical observations in the field.