The importance of settlements

The vast majority of tort claims are settled by negotiation and agreement between the claimant and the defendant's liability insurer, or, occasionally, the defendant personally, usually through the agency of solicitors on both sides. This process has been memorably called ‘litigotiation’. The Pearson Commission estimated from its various surveys that 86% of cases are settled without the commencement of legal proceedings (i.e. a claim form); 11% are settled after the commencement of proceedings but before the case is set down for trial; 2% are settled after setting down; and 1% are settled at the door of the court or during the trial, or are actually disposed of by trial. Many other surveys and studies confirm the general pattern of these figures.

On the basis of these facts, the tort system could be regarded as an administrative process handled by insurance adjustors and solicitors incorporating a ‘right of appeal’ to a court of law.