Settlement Around the World: Settlement Rates in the Largest Economies

Abstract

This article presents the results of the first rigorous attempt to collect settlement rate data from a substantial number of countries. Data on settlement were collected for twenty-three of the twenty-five largest economies. Settlement rates vary greatly, from below 15% in France, Belgium, and Russia, to over two-thirds in Australia. Settlement rates also vary dramatically by legal origin, with French civil law countries generally having the lowest settlement rates, and common law countries generally the highest. In addition, as predicted by simple economic theory, settlement rates are correlated positively with litigation costs and early disclosure requirements, but only weakly with fee shifting rules. Settlement rates are generally highest for tort cases. The analysis in this paper suggests that selection effects may not be a significant problem for empirical work involving civil law countries.