Just Tort Settlements

Abstract

In the United States, most civil disputes settle, often under a cloak of secrecy. Recently, secret settlements—particularly those that conceal a matter of public interest—have come under intense public attention, spurring a wave of restrictive state and federal legislation. And yet, the attitudes of plaintiffs, such as aggrieved employees and consumers, have been strangely absent from the discussion regarding such laws. Indeed, even though settlements are ubiquitous, and ordinary people are crucial to their existence and justice, current literature lacks quantitative data on plaintiffs’ settlement-related attitudes, including on how nondisclosure agreements (“NDAs”) affect the tendency to settle. This Article studies the relationship between the decision to settle a tort dispute and a defendant’s demand for confidentiality, in tandem with other factors which play a role in plaintiffs’ settlement decision-making. The Article uses a preregistered survey experiment with two scenarios—one describing a products liability dispute and the other a sexual harassment dispute—that were each distributed to a representative sample of 500 Americans. The Article finds, first, that plaintiffs are more likely to accept a public than a confidential settlement offer, and, independently, are more prone to take a settlement with a first-time wrongdoer than with a repeat wrongdoer. Second, settlement goals are context dependent. Plaintiffs are overall more willing to settle a products liability dispute than a sexual harassment case. And when the wrongdoer is discharged as part of the settlement, only sexual harassment plaintiffs seem to care. Yet the amount of money on the table matters in both scenarios, suggesting that the monetary incentive might eventually swallow any competing urge to make valuable settlement information public. The Article argues that these effects reflect a broader tendency for tort plaintiffs to consider non-monetary objectives—including expressive and punitive goals—when weighing settlement offers. As such, it has direct implications for negotiating and regulating tort settlements under various liability regimes. Recognizing the central role of settlements in resolving tort disputes, alongside the key position employees and consumers hold in decisions regarding settlement, this Article pushes beyond intuitions about settlement decision-making. It considers plaintiffs’ engagement with established functions of tort law and points to how private and public law concepts about compensation and punishment for wrongdoing are intertwined in settlement decisions.

Keywords: transparency, dispute resolution, sunshine law, sexual harassment, products liability, NDA, court records, public interest, confidentiality agreement, empirical legal studies, settlement, victim privacy