Agencies possess considerable discretion in settling cases. This may occur anytime in the life of a case. Little attention is given to settlement in the APA, but it does require agencies to entertain settlement offers prior to the commencement of adjudicatory hearings if “time, the nature of proceedings, and the public interest permit.” Even if permitted, the decision whether to accept such an offer is within the discretion of the appropriate agency officials.

In addition to settlement, the APA encourages agencies to use alternative dispute resolution (ADR) to dispose of cases. ADR is generally regarded as less expensive and less time-consuming than formal adjudication or litigation. Mediation, arbitration, and conciliation are commonly used forms of ADR.