Case Selection after the Trial: A Study of Post-Trial Settlement and Appeal

Abstract

This paper studies the decisions of litigants in civil disputes whether to settle or appeal a case after a trial. The paper argues that when litigants are unable to meet damage awards in full only cases where the defendant’s position is particularly strong will face appellate court review. In the absence of financial constraints defendants will be more inclined to take chances with cases where their position is weaker. The paper tests the importance of award size and financial constraints in driving settlement and appeals decisions using survey data about post-trial activity for a sample of verdicts in California and New York from 2001-2004. These results indicate that the case-selection model is highly relevant in determining which cases are ultimately resolved by an appellate court. Additionally, defendant financial resources are an important factor that strongly influences post-trial outcomes.