Document Type

Article

Publication Title

Ohio State Journal on Dispute Resolution

Publication Date

1994

Page Number

1

Keywords

compromise, dispute resolution

Disciplines

Dispute Resolution and Arbitration | Law

Abstract

When two litigants resolve a dispute through out-of-court settlement rather than trial, they realize joint gains of trade equal to the sum of the costs both parties would have incurred had they obtained a trial judgment minus the costs they incur reaching settlement. This opportunity for mutual gain causes most civil lawsuits to settle out-of-court. Yet, in spite of the opportunity for joint gain, negotiations fail in a significant number of lawsuits. One reason for this surprising result is that even when joint gains are substantial and obvious to the litigants, they still must agree on a method of dividing those gains of trade - a delicate and often perilous undertaking.

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