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An experiment with two-way offers into court: restoring the balance in pre-trial negotiation

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    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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    Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 28.

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    Length: 24
    Date of creation: Sep 1998
    Date of revision:
    Handle: RePEc:edn:esedps:28
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    1. Anderson, David A, 1994. "Improving Settlement Devices: Rule 68 and Beyond," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 225-46, January.
    2. Landes, William M, 1971. "An Economic Analysis of the Courts," Journal of Law and Economics, University of Chicago Press, vol. 14(1), pages 61-107, April.
    3. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
    4. Coursey, Don L. & Stanley, Linda R., 1988. "Pretrial bargaining behavior within the shadow of the law: Theory and experimental evidence," International Review of Law and Economics, Elsevier, vol. 8(2), pages 161-179, December.
    5. Chung, Tai-Yeong, 1996. "Settlement of Litigation under Rule 68: An Economic Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 261-86, January.
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