Wednesday, May 22, 2013
Victor Abel Pereyra and Benjamin Sunshine, of University of Illinois College of Law, have posted on SSRN their paper Access-to-Justice v. Efficiency: An Empirical Study of Settlement Rates After Twombly and Iqbal.
A party’s decision to settle may be affected by the plausibility pleading standard required by Twombly. While previous empirical studies have focused on motions to dismiss, this study attempts to find a relationship between settlement rates and the pleading standard. Our data and analysis show that the probability of settling after Twombly has decreased while the rates of settlements themselves are increasing. In particular, IP and civil rights cases are especially likely to settle and "meritorious" claims settle at a higher rate than "non-meritorious" claims. These findings question the current arguments that the Twombly pleading standard may be inhibiting access to justice and/or improving efficiency. The goal of conserving judicial resources may have been circumvented by litigant behavior as more cases are going on to litigation rather than settling. The access to justice arguments may have also been challenged in that more cases are being adjudicated after Twombly instead of less.