The “Natural” Settlement Rate and Court-Connected ADR

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:

Enlarge Graphic

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.


2 Responses

  1. The phrases “burden of court-ordered mediation and “reluctant to endure” are are certainly great examples of how to shape perception and opinion through negative language. Although this shows some skill in public relations, it does not help the families struggling with conflict.

    The amazingly weak financial argument against mediation assumes that families are not expected to shoulder the “burden” of paying for their attorneys.

  2. Our analysis of settlement rates in court with mandatory ADR programs is based on empirical data. By grounding our analysis in fact, we hope to avoid sharing mere opinions. The data shows that parties to cases in Georgia’s state, superior and magistrate courts that are referred to mandatory ADR are settling out of court at an increasing rate prior to mediation.

    To really help families with conflict, we should consider families who are increasingly settling out of court prior to mandatory mediation. When a court orders mediation, they may be forced to pay for the mediator’s time as well as their attorney’s time, and this financial burden may compel them to settle matters rather than pay the high cost of justice.

    It is important to allow facts to inform and influence our opinions. Policies enacted with the intent of helping people may not actually achieve their desire result in practice.

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