It's one of a whole bunch of "real-life
court case" shows, which have sprouted up ever since the
popularity in the
80s of
Judge Wapner's
The People's Court. Judge Judy seems to have more of an attitude than most of those TV
judges. Generally, on such shows, all participants are paid an appearance fee, to which amounts of
judgments are added or subtracted as appropriate, so questions of
legal bindingness needn't come up except with regard to whatever contract terms the participants may have to agree to prior to the appearance (of which I know nothing, having not actually seen their contract).