IDEAS home Printed from https://ideas.repec.org/a/wly/empleg/v6y2009i1p111-146.html
   My bibliography  Save this article

What is the Settlement Rate and Why Should We Care?

Author

Listed:
  • Theodore Eisenberg
  • Charlotte Lanvers

Abstract

After establishing the importance of knowledge of settlement rates, this article first shows that different research questions can yield different settlement rates. Using data gathered from about 3,300 federal cases in the Eastern District of Pennsylvania (EDPA) and the Northern District of Georgia (NDGA), differing measures of settlement emerge depending on whether one is interested in (1) settlement as a proxy for plaintiffs' litigation success, or (2) settlement as a measure of litigated disputes resolved without final adjudication. Using settlement as a proxy for plaintiff success, we estimate the aggregate settlement rate across case categories in the two districts to have been 66.9 percent in 2001–2002. Regardless of the method of computing settlement rates, no reasonable estimate of settlement rates supports an aggregate rate of over 90 percent of filed cases, despite frequent references to 90 percent or higher settlement rates. The aggregate rate for the EDPA alone was 71.6 percent and for the NDGA alone was 57.8 percent, suggesting significant interdistrict variation, which persists even within case categories. We report separate settlement rates for employment discrimination, constitutional tort, contract, and tort cases in the two districts. The highest settlement rate was 87.2 percent for tort cases in the EDPA and the lowest was 27.3 percent for constitutional tort cases in the NDGA. Our results suggest a hierarchy of settlement rates. Of major case categories, tort cases tend to have the highest settlement rates, then contract cases, then employment discrimination cases, followed by constitutional tort cases. Attorney fee structure and the nature of the parties may explain settlement rate variation. Our findings provide no evidence of a material change in aggregate settlement rates over time.

Suggested Citation

  • Theodore Eisenberg & Charlotte Lanvers, 2009. "What is the Settlement Rate and Why Should We Care?," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 6(1), pages 111-146, March.
    • Handle: RePEc:wly:empleg:v:6:y:2009:i:1:p:111-146
    DOI: 10.1111/j.1740-1461.2009.01139.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1740-1461.2009.01139.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1740-1461.2009.01139.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Friehe, Tim & Pham, Cat Lam, 2020. "Settling with salience-biased defendants," Economics Letters, Elsevier, vol. 192(C).
    2. Belarouci, Matthieu & Vaillant, Nicolas & Wolff, François-Charles, 2024. "Did the French reform of the judicial map affect conciliation activities?," International Review of Law and Economics, Elsevier, vol. 77(C).
    3. Greg Goelzhauser, 2024. "Constitutional accountability for police shootings," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 21(1), pages 92-108, March.
    4. Sasha Romanosky & David Hoffman & Alessandro Acquisti, 2014. "Empirical Analysis of Data Breach Litigation," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(1), pages 74-104, March.
    5. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Zajc, Katarina, 2014. "Understanding modes of civil case disposition: Evidence from Slovenian courts," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 924-939.
    6. Mihael A. Jeklic, 2023. "Can you trust your lawyer's call? Legal advisers exhibit myside bias resistant to debiasing interventions," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 20(2), pages 409-433, June.
    7. Omer Unsal & Blake Rayfield, 2020. "Corporate governance and employee treatment: evidence from takeover defenses," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(2), pages 361-391, April.
    8. Peter Grajzl, 2014. "Behind the Courts’ Walls: Empirical Insights from Slovenia," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(03), pages 39-44, October.
    9. Cédric Argenton & Xiaoyu Wang, 2023. "Litigation and settlement under loss aversion," European Journal of Law and Economics, Springer, vol. 56(2), pages 369-402, October.
    10. Aharony, Joseph & Liu, Chelsea & Yawson, Alfred, 2015. "Corporate litigation and executive turnover," Journal of Corporate Finance, Elsevier, vol. 34(C), pages 268-292.
    11. Morgan Westéus, 2014. "Settlement probability asymmetries in the Swedish Labour Court," European Journal of Law and Economics, Springer, vol. 38(3), pages 485-512, December.
    12. Peter Grajzl & Katarina Zajc, 2017. "Litigation and the timing of settlement: evidence from commercial disputes," European Journal of Law and Economics, Springer, vol. 44(2), pages 287-319, October.
    13. Claudine Desrieux & Romain Espinosa, 2019. "Case selection and judicial decision-making: evidence from French labor courts," European Journal of Law and Economics, Springer, vol. 47(1), pages 57-88, February.
    14. Peter Grajzl & Shikha Silwal, 2020. "The functioning of courts in a developing economy: evidence from Nepal," European Journal of Law and Economics, Springer, vol. 49(1), pages 101-129, February.
    15. repec:ces:ifodic:v:12:y:2014:i:3:p:19131886 is not listed on IDEAS
    16. Jennifer K. Robbennolt & Jessica Bregant & Verity Winship, 2023. "Settlement schemas: How laypeople understand civil settlement," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 20(3), pages 488-533, September.
    17. Liu, Chelsea, 2020. "Judge political affiliation and impacts of corporate environmental litigation," Journal of Corporate Finance, Elsevier, vol. 64(C).
    18. Peter Grajzl, 2014. "Behind the Courts’ Walls: Empirical Insights from Slovenia," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(3), pages 39-44, October.
    19. Chulyoung Kim & S. David Kim & Sangyoon Nam, 2018. "Strict Liability, Settlement, and Moral Concern," Working papers 2018rwp-137, Yonsei University, Yonsei Economics Research Institute.
    20. Eldar Maksymov & Jeffrey Pickerd & D. Jordan Lowe & Mark E. Peecher & Andrew Reffett & Dain C. Donelson, 2020. "The Settlement Norm in Audit Legal Disputes: Insights from Prominent Attorneys$," Contemporary Accounting Research, John Wiley & Sons, vol. 37(3), pages 1400-1443, September.
    21. Antill, Samuel & Grenadier, Steven R., 2023. "Financing the litigation arms race," Journal of Financial Economics, Elsevier, vol. 149(2), pages 218-234.
    22. Julia Shamir & Noam Shamir, 2021. "Third-party funding in a sequential litigation process," European Journal of Law and Economics, Springer, vol. 52(1), pages 169-202, August.
    23. Liu, Chelsea & Aharony, Joseph & Richardson, Grant & Yawson, Alfred, 2016. "Corporate litigation and changes in CEO reputation: Guidance from U.S. Federal Court lawsuits," Journal of Contemporary Accounting and Economics, Elsevier, vol. 12(1), pages 15-34.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:empleg:v:6:y:2009:i:1:p:111-146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1740-1461 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.