Determinants of in-court settlements: empirical evidence from a German trial court

Abstract

AbstractBecause verdicts are typically the more costly resolution of legal disputes, most governments are interested in high settlement rates. In this paper, we use a unique dataset of 860 case records from a German trial court to explore which institutional factors have a significant impact on the decision to settle in civil law litigation. We find that procedural aspects and individual characteristics of the involved judge have a significant impact on in-court settlement probability. We also find that judge-specific aspects such as the judge's gender may have an impact on settlement probabilities in certain subfields of law. Based on our empirical results, we derive some conclusions for legal policies that aim at increasing settlement rates.