Litigation and the Timing of Settlement: Evidence from Commercial Disputes

39 Pages Posted: 4 Sep 2015 Last revised: 6 Nov 2015

See all articles by Peter Grajzl

Peter Grajzl

Washington and Lee University - Department of Economics; CESifo

Katarina Zajc

University of Ljubljana - Faculty of Law

Multiple version iconThere are 2 versions of this paper

Date Written: September 2, 2015

Abstract

Although an overwhelming proportion of all legal disputes end in settlement, the determinants of the timing of settlement remain empirically underexplored. We draw on a novel dataset on the duration of commercial disputes in Slovenia to study how the timing of settlement is shaped by the stages and features of the litigation process. Using competing risk regression analysis, we find that events such as court-annexed mediation and the first court session, which enable the disputing parties to refine their respective expectations about the case outcome, in general reduce case duration to settlement. The magnitude of the respective effects, however, varies with time. Completion of subsequent court sessions, in contrast, does not affect the time to settlement. Judicial workload affects the timing of settlement indirectly, via the effect on the timing of the first court session. We also examine the effect of other case and party characteristics.

Keywords: dispute duration, settlement, litigation, survival analysis

JEL Classification: K41, K49, D02

Suggested Citation

Grajzl, Peter and Zajc, Katarina, Litigation and the Timing of Settlement: Evidence from Commercial Disputes (September 2, 2015). Available at SSRN: https://ssrn.com/abstract=2655389 or http://dx.doi.org/10.2139/ssrn.2655389

Peter Grajzl (Contact Author)

Washington and Lee University - Department of Economics ( email )

Lexington, VA 24450
United States

HOME PAGE: http://home.wlu.edu/~grajzlp/

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Katarina Zajc

University of Ljubljana - Faculty of Law ( email )

Dunajska 104
1000 Ljubljana, 1000
Slovenia

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