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The Timing of Out-of-Court Settlements

Author

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  • Gary M. Fournier
  • Thomas W. Zuehlke

Abstract

Parties to a lawsuit will frequently delay litigation, even in circumstances where a voluntary agreement is eventually reached. This article is concerned with what causes legal disputes to be prolonged over time. We discuss dynamic models of litigation to illustrate how changes in the bargaining environment might generate empirical hazard functions. Comparative statics results are then corroborated with empirical estimates of a hazard function adjusted to account for both the heterogeneity of lawsuits and the nonproportional time dependence suggested by theory.

Suggested Citation

  • Gary M. Fournier & Thomas W. Zuehlke, 1996. "The Timing of Out-of-Court Settlements," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 310-321, Summer.
    • Handle: RePEc:rje:randje:v:27:y:1996:i:summer:p:310-321
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    Citations

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    Cited by:

    1. J.J. Prescott & Kathryn E. Spier & Albert Yoon, 2014. "Trial and Settlement: A Study of High-Low Agreements," Journal of Law and Economics, University of Chicago Press, vol. 57(3), pages 699-746.
    2. Haus, Axel & Juranek, Steffen, 2018. "Non-practicing entities: Enforcement specialists?," International Review of Law and Economics, Elsevier, vol. 53(C), pages 38-49.
    3. J.J. Prescott & Kathryn E. Spier & Albert Yoon, 2014. "Trial and Settlement: A Study of High-Low Agreements," NBER Working Papers 19873, National Bureau of Economic Research, Inc.
    4. Belarouci, Matthieu & Vaillant, Nicolas & Wolff, François-Charles, 2024. "Did the French reform of the judicial map affect conciliation activities?," International Review of Law and Economics, Elsevier, vol. 77(C).
    5. Samantha Bielen & Peter Grajzl & Wim Marneffe, 2017. "Understanding the Time to Court Case Resolution: A Competing Risks Analysis Using Belgian Data," CESifo Working Paper Series 6450, CESifo.
    6. Bar, Talia & Kalinowski, Jesse, 2019. "Patent validity and the timing of settlements," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    7. Bogdan Genchev & Julie Holland Mortimer, 2016. "Empirical Evidence on Conditional Pricing Practices," Boston College Working Papers in Economics 908, Boston College Department of Economics.
    8. James Hughes & Elizabeth Savoca, 1999. "Accounting for censoring in duration data: An application to estimating the effect of legal reforms on the duration of medical malpractice disputes," Journal of Applied Statistics, Taylor & Francis Journals, vol. 26(2), pages 219-228.
    9. Hong Luo & Julie Holland Mortimer, 2017. "Copyright Enforcement: Evidence from Two Field Experiments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(2), pages 499-528, June.
    10. Luke Garrod & Bruce Lyons, 2016. "Early Settlement in European Merger Control," Journal of Industrial Economics, Wiley Blackwell, vol. 64(1), pages 27-63, March.
    11. Morgan Westéus, 2014. "Settlement probability asymmetries in the Swedish Labour Court," European Journal of Law and Economics, Springer, vol. 38(3), pages 485-512, December.
    12. Yvette Harman & Thomas Zuehlke, 2004. "Duration dependence testing for speculative bubbles," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 28(2), pages 147-154, June.
    13. Zhou, J., 2010. "Access to justice : An economic approach," Other publications TiSEM 9d70f451-35c4-4878-92bf-7, Tilburg University, School of Economics and Management.
    14. Peter Grajzl & Katarina Zajc, 2017. "Litigation and the timing of settlement: evidence from commercial disputes," European Journal of Law and Economics, Springer, vol. 44(2), pages 287-319, October.
    15. Miceli, Thomas J., 1999. "Settlement delay as a sorting device," International Review of Law and Economics, Elsevier, vol. 19(2), pages 265-274, June.
    16. Yasutora Watanabe, 2005. "Learning and Bargaining in Dispute Resolution: Theory and Evidence from Medical Malpractice Litigation," 2005 Meeting Papers 440, Society for Economic Dynamics.
    17. Peter L Ormosi, 2011. "Tactical Dilatory Practice in Litigation: Evidence from EC Merger Proceedings," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2011-12, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    18. Luke Garrod & Bruce Lyons, 2011. "Early Settlement and Errors in Merger Control," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2011-05, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    19. Deffains, Bruno & Doriat, Myriam, 1999. "The dynamics of pretrial negotiation in France:: Is there a deadline effect in the French legal system?," International Review of Law and Economics, Elsevier, vol. 19(4), pages 447-470, December.
    20. Ormosi, Peter L., 2012. "Tactical dilatory practice in litigation: Evidence from EC merger proceedings," International Review of Law and Economics, Elsevier, vol. 32(4), pages 370-377.
    21. Hughes, James W. & Savoca, Elizabeth, 1997. "Measuring the effect of legal reforms on the longevity of medical malpractice claims," International Review of Law and Economics, Elsevier, vol. 17(2), pages 261-273, June.
    22. Guha, Brishti, 2019. "Malice in pretrial negotiations," International Review of Law and Economics, Elsevier, vol. 58(C), pages 25-33.
    23. Bielen, Samantha & Grajzl, Peter & Marneffe, Wim, 2017. "Procedural events, judge characteristics, and the timing of settlement," International Review of Law and Economics, Elsevier, vol. 52(C), pages 97-110.

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