Abstract Many legal disputes are resolved through settlement. The dominant theory explaining settlements – known as “bargaining in the shadow of the law” – assumes that litigants are informed, rational actors inclined to bargain toward a settlement prior to court proceedings. Yet many settlements are negotiated after litigants have appeared in court expecting to go to trial. This article argues that court organizational mechanisms play an undertheorized role in facilitating settlement agreements. To build theory on organizational mechanisms, we examine the case of eviction settlements. Drawing on ethnographic observations and interviews in a California eviction court, we find that organizational rules and workgroup norms funnel mostly unrepresented tenants – sometimes, in coercive ways – into unregulated hallway conversations with landlord attorneys and/or participation in the court’s mediation program. Through relational interactions with legal professionals in these organizational spaces, tenants are taught the risks of trial and the benefits of settlement. As a result, most tenants in our sample come to recognize their legal culpability and view settlement agreements as legitimate, even as their negotiated settlements reproduce their housing insecurity. We discuss implications for bargaining theory and research on housing insecurity.
Hardaway et al. (2026) studied this question.