An experiment with two-way offers into court: restoring the balance in pre-trial negotiation
Defendant offers into court is common procedural device aimed at increasing the probability that pre-trial negotiations will lead to out of court settlement. Both in the UK following the Woolf Report (1996) and the Cullen Report (1995) and in the USA, the idea of extending the arrangement to plaintiff offers into court has been suggested. This paper presents an extension of the theoretical work by Chung (1996) on defendant offers into court under the American rule to cover the English rule and to extend to two-way offers into court. It also reports on experiments conducted to measure the effect of moving to two-way offers into court. The results suggest no impact on the propensity to settle and a statistically significant but empirically modest movement of settlement in favour of the plaintiff.
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National Bureau of Economic Research, Inc.
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