What is the Settlement Rate and Why Should We Care?

30 Pages Posted: 3 Oct 2008 Last revised: 8 Dec 2008

See all articles by Theodore Eisenberg

Theodore Eisenberg

Cornell University, Law School (Deceased)

Charlotte Lanvers

Disability Rights Education & Defense Fund, Inc.

Date Written: November 21, 2008

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% in 2001-02. Regardless of the method of computing settlement rates, no reasonable estimate of settlement rates supports an aggregate rate of over 90% of filed cases, despite frequent references to 90% or higher settlement rates. The aggregate rate for the EDPA alone was 71.6% and for the NDGA alone was 57.8%, 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% for tort cases in the EDPA and the lowest was 27.3% 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.

Keywords: Settlement, Litigation, Courts, Civil Rights, Tort

JEL Classification: J70, K00, K12, K13, K41

Suggested Citation

Eisenberg, Theodore and Lanvers, Charlotte, What is the Settlement Rate and Why Should We Care? (November 21, 2008). Cornell Legal Studies Research Paper No. 08-30. Available at SSRN: https://ssrn.com/abstract=1276383 or http://dx.doi.org/10.2139/ssrn.1276383

Theodore Eisenberg (Contact Author)

Cornell University, Law School (Deceased) ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

Charlotte Lanvers

Disability Rights Education & Defense Fund, Inc. ( email )

2212 Sixth St.
Berkeley, CA 94710
United States

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