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If I understand correctly, Batei Din encourage litigants to compromise / settle out of court rather than go to trial.

Where in Gemarah is this stated explicitly?

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    It is a machlokes tana'im in Sanhedrin 6b, and we follow the view of R' Yehoshua ben Karcha (Rambam Hil. Sanhedrin 22:4) that the court should encourage a mediated settlement: "רבי יהושע בן קרחה אומר מצוה לבצוע שנאמר אמת ומשפט שלום שפטו בשעריכם והלא במקום שיש משפט אין שלום ובמקום שיש שלום אין משפט אלא איזהו משפט שיש בו שלום הוי אומר זה ביצוע".
    – Fred
    Jan 12 at 22:26
  • In addition to Fred's useful references, we should add that the Maharsha notes a critical difference between compromise and court decision: >Compromise is arrived at with the agreement and willingness of both parties, which is not the case with judgment. Some point out that compromise can be unfair if it involves intimidation and threats, and a court decision is preferable. Others point out that a court decision engenders bitterness in the losing side.
    – Maurice Mizrahi
    Jan 13 at 0:39

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