^^^
Those I know on the show say similar.
The producers search the docket of small claims cases filed and will extend an invitation to both parties to have it heard by Judy if they think it will be interesting... the parties are under no obligation to accept the invitaiton.
In reality... the way it works is just like any other binding arbitration... both parties agree to abide to a neutral third party's decision.
In the case of Judge Judy or People's Court, the award is paid for by the show as well as travel expenses.
The way Peoples Court worked is each case had a $5,000 pot... any award was deducted from the pot and the remainder split 50/50.
Both Judy and Wapner had decades on the bench.
Judy has said several times she is amazed she is getting paid what she does to settle small claims cases when for 30 years, mostly in family court deciding children's futures, he annual pay then is close to what she earns for a single taping session of Judge Judy...
I don't always agree with her... but, we are on the same page 98% of the time.
Some that think it is scripted should go to Landlord/Tenant court for a day... it is exactly like the show plus profanities thrown in... at least where I live.