Because most lawsuits are settled out of court, many have wondered whether court-ordered ADR actually reduces the numbers of trials or simply resolves through mediation cases that would have settled anyway. In other words, the question is whether court-connected mediation programs improve over the “natural” settlement rate of litigated cases.
Our empirical analysis of mediated cases doesn’t offer us a crystal ball to discern whether a mediated settlement would have occurred naturally, without the involvement of a mediator, but has disclosed an interesting feature of out-of-court settlement rates in court-connected ADR programs in Georgia.
Generally, when a case is referred to a mandatory ADR process, the parties have some time make arrangement or prepare for a mediation session arranged by the court. This provides the parties some opportunity to resolve the matter on their own, prior to mediation. Between 1997 and 2005, the Georgia Office of Dispute Resolution recorded the number of cases that where referred to mandatory, court-connected ADR but were resolved prior to mediation. We calculated the percentage of referred cases that were resolved prior to mediation in different types of court over the time period of available data. A graphical depiction of the data reveals several upward trends:
It appears that in state, superior and juvenile courts an increasing percentage of cases referred to mediation settle on their own before mediation actually takes place. Apparently, the natural settlement rate is not a natural rate, but rather responsive to some variables. One might hypothesize that an increasing percentage of parties are settling their cases out of court to avoid the time and expense of court-ordered mediation.
While courts should encourage voluntary settlements, one has to be concerned that the burden of court-ordered mediation may be a deterrent to pursuing justice under the law. If courts were simply to impose a $1,000 fine on all parties who refused to settle their case within a certain amount of time, such a rule would raise serious due process concerns but may be a more efficient and direct method of promoting settlements than ordering parties to mediation sessions that they are increasingly reluctant to endure.
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