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Litigation and the Timing of Settlement: Evidence from Commercial Disputes

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  • Peter Grajzl
  • Katarina Zajc

Abstract

Although an overwhelming proportion of all legal disputes end in settlement, the determinants of the timing of settlement remain empirically underexplored. We draw on a novel dataset on the duration of commercial disputes in Slovenia to study how the timing of settlement is shaped by the stages and features of the litigation process. Using competing risk regression analysis, we find that events such as court-annexed mediation and the first court session, which enable the disputing parties to refine their respective expectations about the case outcome, in general reduce case duration to settlement. The magnitude of the respective effects, however, varies with time. Completion of subsequent court sessions, in contrast, does not affect the time to settlement. Judicial workload affects the timing of settlement indirectly, via the effect on the timing of the first court session. We also examine the effect of other case and party characteristics.

Suggested Citation

  • Peter Grajzl & Katarina Zajc, 2015. "Litigation and the Timing of Settlement: Evidence from Commercial Disputes," CESifo Working Paper Series 5520, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5520
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    References listed on IDEAS

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    Cited by:

    1. 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 Group Munich.
    2. Berlemann, Michael & Christmann, Robin, 2017. "The Role of Precedents on Court Delay - Evidence from a civil law country," MPRA Paper 80057, University Library of Munich, Germany.

    More about this item

    Keywords

    dispute duration; settlement; litigation; survival analysis;

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact

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