Diversion from court has become a popular solution to perceived weaknesses in the traditional justice system, particularly in recent years with the advent of family group conferences. But evidence for the detrimental effect of court is weak. Previous research into this question shows a number of deficiencies. In particular, the range of controls used to isolate treatment from selection effects are, in most cases, inadequate for this purpose, and the measurement of the dependent variable (recidivism) is typically insensitive. There is also a failure to test for subjective reactions to either court or diversion. Because the theoretical justification for diversion is derived from labelling theory, which predicts that psychological reactions to court such as feelings of stigmatization will influence future behaviour, this is a major deficiency in the literature.