Summary

Yosef Karo Shulchan Aruch — Choshen Mishpat 12

Paragraph 1- When two parties come to court and one is easygoing and one is tough, before the claims have been heard or even if they have been heard but the judge does not know which way the ruling leans towards, a judge may say I do not want to process this case lest the judge finds the tough party liable and such party will pursue the judge. Once he has heard their claims and knows which way the ruling leans towards, he is not permitted to say he does not want to process the case. If the judge has been appointed by the public, he must hear the case.
Source: Wikisource

Yosef Karo Shulchan Aruch — Choshen Mishpat 12

An individual who is not a judge, however, is permitted to make a pshara between them, but not as an official case of law. If the court has obligated a party to take an oath, the court may make a pshara to avoid the punishment of an oath. A court cannot force a party to go beyond the letter of the law even if they feel it is appropriate. Some disagree.
Paragraph 3- A court has the right to be liberal with orphan money outside the strict law in order to save them from quarreling.
Source: Wikisource

Yosef Karo Shulchan Aruch — Choshen Mishpat 12

If he does so he will not fulfill his heavenly obligations until he pays back what rightfully belongs to the other party.
Paragraph 7- Even if the parties agree in court to pshara they can retract so long as they have not made a kinyan because pshara requires a kinyan, even with three judges. Once they have made a kinyan, however, they can no longer retract, even with a solo judge. Some say this only applies where there are at least two judges. A kinyan is not the only mechanism that would work.
Source: Wikisource

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