HOW many cases settle?

We ADR junkies have become fond of quoting a statistic that “98% of all cases settle.” Trouble is, it isn’t true. I’ve said it in trainings, so I’m responsible for perpetuating this lie. We wandered into this innocently enough. For some years now, courts, including Michigan’s State Court Administrative Office, have released statistics indicating that fewer than 5% of all civil cases actually go to trial that results in a verdict. In our zeal to promote ADR, we assumed this meant that the other 95% settled. But of course that’s not true; any litigator will tell you about their motion practice and of how many cases are disposed of by summary disposition. In addition, there are default judgments (which don’t go to trial) and any number of reasons why a case might be dismissed before trial.

So I’m trying to choose my words more carefully. It’s fair to say that “most cases are resolved short of a trial.” It’s also fair to say that many more cases are settled than are resolved by verdict. But I’ve wondered, just how many cases are settled, as opposed to dismissed?

Now we have some data based on Michigan circuit court cases to answer that question. As part of its research on the effectiveness of case evaluation and mediation, the study commissioned by the State Court Administrative Office culled nearly 400 civil (non-domestic) cases from around the state to analyze how a case ends. Here’s what they learned (see 23 of the Report):

O Where neither case evaluation nor mediation was used, 45% of all cases still settled. We’ve always known that, even without a mediator’s intervention, some percentage of cases would settle on their own. This is also a sign that, contrary to some mediators’ concern, lawyers are still able to negotiate settlements and have not surrendered all their negotiation skills to the mediator.

O When the case went to mediation, a whopping 84% settled in mediation, and none of the rest went to trial.

O A portion of all cases filed are disposed of via summary disposition, and a higher proportion are dismissed by default or some other reason. Of cases not ordered to case evaluation or mediation, 11% are resolved by summary disposition, 3% by trial verdict, and 41% are dismissed for some other reason, including a default judgment. Cases that went to ADR had proportionately lower summary disposition rates. Thus, it’s fair to say that a case has no more than a 1-in-10 chance of being dismissed by summary disposition.

O Interestingly, when a case went both to case evaluation and mediation, it was more likely to end up in court: 10% of those cases went to trial verdict, whereas none of the cases that went only to mediation ended up in court.

We can’t say, “Most cases settle.” An accomplished litigator in one of our trainings said in his mediator opening statement, “Most cases settle, so it’s not a matter of whether your case will settle, but when.” I thought that was very effective, so I’ve used it in my mediations. But now I need to modify it: “Most cases that get this far, settle …”

We can say that most cases that go to case evaluation and/or mediation settle. We can say that very few cases go to trial. We can say that cases are more likely to be settled—through negotiation, mediation or case evaluation—than disposed of by any other means, such as a dismissal, default judgment or summary disposition.

ADR is effective. We just need to be careful not to over-sell it.

 

 

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