Taking It Outside (the Court)

Imagine someone slips and falls on the stairs in a store and is seriously hurt. If there was evidence that the store owner hadn’t kept the stairs in good repair, the person who was hurt could sue the store owner for money to cover the costs of their injuries. If this happened on television, we might expect a dramatic trial, with a jury deciding the winner. But in the real world, this case would most likely “settle,” with the injured person and the store owner making a deal to end the case. Settlement agreements are binding contracts between the parties, or the groups of people involved. Usually, the person accused of having caused the harm agrees to pay money to the injured person. In exchange, the injured person agrees to drop the lawsuit.

Many legal disputes are resolved by a settlement agreement. We wanted to know what people think settlement actually means and how that compares to what settlement looks like in real legal cases. People’s understanding of how disputes usually get resolved can affect whether they choose to start a lawsuit or how they might negotiate with the other side. It can also affect what they think about people who settle, or how good or bad they think the legal system is in general.

Researchers have been interested in what people think of the legal system for a long time. There have been studies looking at what people think about courts, judges, juries, and particular legal rules. Some research has looked at people’s experiences with court processes, whether they are satisfied with how they are treated, and how their cases turned out. But before this study, no one had looked at how people understand what it means to “settle” a case.

We surveyed more than 1,000 people from all across the U.S. The survey respondents ranged in age from 18 to 92 years old and included people of different gender, race, and level of education. We asked them to tell us, in their own words, what it means to “settle” a legal case. This is what we asked:

Sometimes legal disputes “settle.” For example, two people who were involved in an accident or a disagreement over a contract might “settle” their dispute, or an institution like a hospital, a business, or the manufacturer of a product might “settle” a claim against it. Please describe in your own words what you think it means when a dispute “settles.”

Provide as much detail as you can, including things that you think might be obvious.

We also asked a series of more specific questions about what it means to “settle” a case and what might be included in an agreement to settle.

We found that people have a pretty good understanding of the basics of settlement. Only a few people specifically described settlement as a formal contract. But people mostly seemed to understand that in a settlement, the parties involved in the lawsuit come to an agreement about how to end their dispute. People also tended to recognize this often meant the parties had to compromise.

There was more confusion about the role of judges and juries in settlement. In the U.S. civil legal system, judges do not typically make the decision to settle or determine the terms of settlement. Additionally, juries have little to no role in settlement. Instead, these decisions are the responsibility of the parties. Many respondents recognized that settlement is something that happens “out of court” or without the involvement of a judge or jury. People also often mentioned reasons why settling might be a better way to resolve a dispute. These included saving time and avoiding the costs, risks  and publicity of a trial. But some people also told us they thought  settlement involved decisions made by a judge or a jury.

In a settlement, the parties can determine how they want to settle their dispute. They may include a variety of terms in their deal. A typical settlement will at least provide for one party to pay money to the other in exchange for an agreement to drop the lawsuit. Our respondents seemed to understand these fundamentals and many focused on these payments in their descriptions. Almost all of our respondents thought that settlement involved the payment of money from one party to the other at least some of the time. Similarly, almost all respondents thought that settlement at least sometimes includes an agreement to drop the lawsuit and not to sue again for the same thing.

Agreement to keep things confidential is not always included in a settlement, but is fairly common. Most people did not mention this secrecy when they described settlement. But when we asked specifically whether settlements include an agreement to keep things secret, the vast majority of people thought that settlement at least sometimes includes an agreement to avoid  talking about the settlement or what happened to cause the dispute.

Most people’s experience with lawsuits comes from television, movies, or the news. The resolutions that are usually shown there involve trials rather than settlement. So, it is interesting that people mostly understand settlement correctly. 

We were also interested in what people assumed about a case when it was settled. What does settlement say about blame or responsibility? For example, do people think that parties who pay money are basically admitting they did something wrong?

People didn’t think settlements were very likely to include either a specific denial or an explicit admission of wrongdoing. They seemed to correctly recognize that someone might settle a lawsuit for all sorts of reasons. Someone might not want to spend the time or money on a trial, or might not want bad publicity. Lawyers will also point out that settlement doesn’t require anyone to admit fault. Still, about half of the people we surveyed thought that settlement implied some admission of responsibility.

Understanding how people think about fault when cases settle is important. People deciding about whether to settle care about whether other people will think they did something wrong. And one job of the legal system is to decide who is responsible when someone is injured or harmed. People’s interpretations of what the legal system says about fault also probably influences whether people think the legal system is fair. People who think settlements allow guilty parties to get off the hook or to pay money to sweep something under the rug may not see the system as fair. On the other side, people who think settlements involve innocent parties having to pay money to resolve cases might also think the system is unfair. In contrast, those who think settlements seem like good compromises are more likely to see the system as fair.  

The rule of law depends on the connection between the public and the legal system. What people think about how disputes get resolved in the legal system is likely to affect whether they turn to the legal system when they are injured or feel they have been treated unfairly. What people think settlement means and how it works will affect their expectations about what the legal system can help them accomplish. This also affects how they might choose to compromise with the other side. What people think about parties who settle a case can affect their future dealings and reputation. All of these ideas and understandings around settling cases can affect whether or not people have confidence in the legal system and the decisions that are made within it.

Written By: Dr. Jennifer K. Robbennolt, Dr. Jessica Bregant, & Dr. Verity Winship

Academic Editor: Neuroscientist 

Non-Academic Editor: Nurse

Original Paper

• Title: Settlement schemas: How laypeople understand civil settlement

• Authors: Jennifer K. Robbennolt, Jessica Bregant, Verity Winship

• Journal: Journal of Empirical Legal Studies

• Date Published: 20 June 2023

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