Does court-annexed mediation facilitate case disposition? Evidence from civil and commercial lawsuits

We examine the effectiveness of court-annexed mediation (CAM) in facilitating case disposition, drawing on nearly 380,000 civil and commercial disputes adjudicated in Slovenian first-instance courts between 2009 and 2023. To address CAM’s endogeneity, we leverage a rich set of covariates and combine propensity score estimation with matching and parametric analysis. Conducting CAM, on average, reduces case duration by 12 % (42 days based on sample mean) and raises the likelihood of settlement by 25–32 percentage points (60–176 % of mean settlement probability, depending on the definition). CAM’s effect, however, varies considerably across different cases. CAM significantly reduces duration in commercial, intellectual property, damages, and enforcement lawsuits, as well as in cases filed during backlog periods and in courts that adopted CAM early. By contrast, we find no effect of CAM on duration in disputes involving five or more parties. CAM improves settlement prospects across all examined case groups—especially in small-value claims, commercial and enforcement lawsuits, and disputes in which neither party is represented by an attorney. Notably, the key determinant of whether CAM is offered and conducted is the identity of the presiding judge, underscoring the critical role judges play in driving CAM’s adoption.