Settlement, Mediation and Arbitration

Learn how civil cases settle: negotiation, mediation, arbitration and court programs, the rule that protects settlement talks, offers of judgment, and how a case ends. This Lawtopolis course on settlement and mediation has 5 short lessons and a quiz, and every lesson links to the official rule text.

What you will learn about settlement and mediation

• The difference between negotiation, mediation and arbitration
• How FRE 408 limits the use of settlement talks as evidence
• How a Rule 68 offer of judgment shifts costs
• How a settlement is written down and how the case is dismissed

Who this course is for

• Parties to a civil case
• Students, paralegals and anyone curious about dispute resolution

Lessons in this course

1. Why most cases settle

Most civil cases end without a trial, through settlement, dismissal or a ruling on a motion. Courts encourage settlement. FRCP 16(c)(2)(I) lists settlement and the use of special procedures to help resolve the dispute among the topics for a pretrial conference.

2. Negotiation, mediation and arbitration

Many contracts contain arbitration clauses. For example, the Federal Arbitration Act, 9 U.S.C. § 2, makes a written agreement to arbitrate in a contract involving commerce valid and enforceable, except on grounds that exist for revoking any contract. A party may ask a court to confirm an award within one year (9 U.S.C. § 9); the grounds to vacate an award are narrow (9 U.S.C. § 10), and notice of a motion to vacate must be served within three months after the award is filed or delivered (9 U.S.C. § 12).

3. How settlement talks are protected

FRE 408 keeps settlement talks out of evidence for some purposes. In short, a party cannot use an offer to settle, or statements made while negotiating, to prove or disprove the validity or amount of a disputed claim, or to impeach with a prior inconsistent statement. However, a court can still admit the evidence for other purposes, such as showing a witness’s bias. Also, facts do not become protected just because someone mentioned them during settlement talks.

4. Offers of judgment under FRCP 68

At least 14 days before trial, a party defending against a claim may serve an offer to allow judgment on specified terms (FRCP 68(a)). The other party then has 14 days after service to accept it in writing. If the party does not accept it, the rule treats the offer as withdrawn.

5. Writing it down and ending the case

A settlement agreement is a contract. It usually states what each side will do, when payment is due, the claims being released, and how the case will be dismissed. Some settlements require court approval, such as settlements for minors and class actions (FRCP 23(e)).

Next steps after this settlement and mediation course

When you finish, take the quiz to check your understanding. After that, keep going with the related pages in the Motions & Procedures library, the Legal Glossary and the Research Center. For the official text, read the current federal rules on uscourts.gov, and also check your own court’s local rules.

Lawtopolis provides legal information and education, not legal advice. Rules change, so check the current version of your court’s rules before you file.

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