Why Settle for Less? Improving Settlement Conferences in Federal Court
October 31, 2019 | 94 Wash. L. Rev. 1233
William P. Lynch
Abstract: Most cases settle before trial. Recent studies show that approximately 1% of cases filed in federal court go to trial. Alternative dispute resolution processes have been fully incorporated into federal court, and settlement conferences have long been used by federal court judges to control their dockets. Do they provide litigants with both substantive and procedural justice in the vast majority of cases that do not proceed to trial? Lawyers have raised concerns about judicial coercion to settle cases at settlement conferences, the loss of confidentiality that occurs when parties raise claims of bad faith participation at the conference, and that litigation over the level of participation at settlement conference threatens the premise that settlement conferences help reduce court congestion.
This Article analyzes the dynamics of the settlement conference to show how common intuitive biases and other factors may cause each of the participants—the parties, insurers, lawyers, and judge—to incorrectly evaluate a case and whether it should settle. The Article reviews recent studies of judicial reasoning and decisionmaking, case law and empirical studies to reach several conclusions. The first is that trial judges should not hold a settlement conference in their own cases. Second, courts should adopt an objective standard for assessing good faith participation at a settlement conference. Third, courts should not award sanctions against a party for failing to bargain sufficiently at a settlement conference or for failing to have a representative present with full settlement authority. The Article concludes by suggesting several procedural reforms, aimed at improving the actual and perceived fairness of the proceeding.
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