7000
CIVIL PROCEDURE: GENERAL
Bruce H. Kobayashi and Jeffrey S. Parker
Associate Professor of Law and Professor of Law
George Mason University School of Law
© Copyright 1998 Bruce H. Kobayashi and Jeffrey S. Parker
Contents
4. The Economic Analysis of Procedural Rules
5. The Economic Model of Litigation
7. The Choice Between Judge and Jury Trials
8. Jury Structure and Decision Rule
10. The Trial/Settlement Decision
11. The Prediction Failure Model
12. The Priest-Klein Selection Model
13. Settlement Failure and Discovery
14. Amendments to the Discovery Rules
16. External Effects and Procedural Rules
17. Common Law Packaging Rules
18. Offensive Non-Mutual Collateral Estoppel
19. Defensive Non-Mutual Collateral Estoppel
C. The Bargaining Failure Model and Asymmetric Information
21. Bargaining Failure and Procedural Rules
D. Lawyer-Client and Client-Client Agency Costs
22. Lawyer-Client Agency Costs
23. Contribution, Indemnity, and Agreements with MultipleDefendants
E. Effect of the Decision to File a Suit and the Decision to Avoid aLawsuit
24. Incentives to Avoid Litigation
25. The Decision to File a Lawsuit
26. The Role of Sequencing of and Exit from Litigation
29. The Process of Procedural Rulemaking
Bibliography on Civil Procedure: General (7000)
The economic analysis of civil litigation has focused on the action of thelitigants and on the effects of substantive and procedural rules on theirbehavior. This chapter focuses on the economic analysis of procedural rules andhow these rules alter the incentives of the litigants to file, settle and litigatedisputes. Such procedural rules affect the private costs and benefits of litigationthrough altering the net expected value and loss faced by the plaintiff anddefendant. Procedural rules also affect the social costs and benefits of litigationby affecting the both the direct and error costs of litigation. The analysis in thechapter is organized around the U.S. Federal Rules of Civil Procedure, and inreverse chronological order to reflect the economic analyses use of backwardsinduction to examine civil litigation. Topics examined in depth includesequencing rules, rules that affect the capitalization of litigation over parties andclaims, the rules of discovery, and juries.
JEL classification : K4, K40 K41.
Keywords : Civil Procedure, Civil Litigation, Settlement, Trials.
The economic analysis of civil litigation, following upon the pioneering work of Landes (1971) , Gould (1973) , and Posner (1973) , has proven to be a fruitful area.Economic analyses of litigation have focused both upon the actions of partiesin civil litigation and upon the effects of substantive and procedural rules on thelitigants' behavior (see Cooter and Rubinfeld (1989) for a previous survey of thefield). This chapter focuses on the economic analysis of procedural rules. Papersin this field generally have examined the effects of procedural rules have on errorcosts and the direct costs of litigation. The length of the reference list annexedto this chapter indicates the extent of academic interest in studying the economiceffects of procedural rules, and the consequences of alterations to those rules.
The organizing framework for this chapter generally follows the U.S. FederalRules of Civil Procedure (FRCP). The FRCP, as supplemented by statutory anddecisional standards concerning the jurisdiction of courts and the preclusiveeffects of judgments, regulate most aspects of the civil litigation process, fromthe general statement of the purpose of the rules to the particularized standardsregarding process, pleadings, lawyer sanctions, discovery, the allocation of legalcosts, the relationship between multiple parties (including the regulation andcertification of class actions), motions, trials, and judgments. Since theirpromulgation in 1938, the FRCP have provided generally uniform rules for theconduct of litigation in the U.S. Federal courts, and similar rules have beenadopted in a majority of American states (for a comparison of federal and stateprocedural rules, see Oakley and Coon (1986) ). In addition, the Federal Ruleshave been frequently revised, and the process of rulemaking itself has becomea topic for economic and legal analysis. However, we do not discuss the rulesand related topics in numerical order. Rather, because the economic analysis oflitigation must be forward looking, and thus proceed using backwards induction,our chapter is organized in reverse chronological order.
Topics reviewed in depth in this chapter include sequencing rules, rules thataffect the capitalization of litigation over parties and claims, the rules ofdiscovery, and juries. Related areas not addressed in detail in this chapter aretreated in other sections of this volume. These areas include: other areas of civilprocedure, including fee shifting [7300], the litigation/settlement decision [7400],and class actions [7600]; the organization of the courts, including jurisdictionalissues [7100-7200]; criminal procedure [7700]; the economics of crime andpunishment [8000-8600]; arbitration and the private enforcement of law [7500];bankruptcy proceedings [7800]; legal error, rules versus standards, and accuracyin adjudication [790], punitive damages [3700], the computing of damages,including the allocations of damages via contribution and indemnity rules [3500];and the production of legal rules and precedent [9000-9900]. In addition, issuesrelating to evidence and information in litigation, including the rules ofdiscovery, attorney client privilege, and advice for litigation, are examined in acompanion section on evidence [7900].
4. The Economic Analysis of Procedural Rules
Economic analyses of procedural rules generally have proceeded within Posner's(1973) framework, which conceives the purpose of such rules to be theminimization of the sum of error costs and direct costs. See also Tullock (1975) and Posner (1992) for a general analysis of procedure. Consistent with thisframework, Rule 1 of the FRCP directs that the rules be construed andadministered to secure the just, speedy, and inexpensive determination of everyaction. Economic analyses of procedural rules focus on the effect such ruleshave on the incentives of potential and actual litigants. Thus, the economicanalysis of procedural rules must begin with an economic model of litigation.
5. The Economic Model of Litigation
The basic economic model of litigation has two parties, a plaintiff (p) that has apotential claim against the defendant (d). The plaintiff's estimate of the netexpected value ( NEV ) of the claim equals his estimate of the probability ( P ) thathe or she will prevail ( P p ) multiplied by the expected award ( D p ), net of themarginal costs to the plaintiff of proceeding to the next stage of litigation ( C p ).The defendant's objective function for estimating expected loss ( EL ) isdeveloped in parallel fashion, as equaling the defendant's estimate of theprobability the plaintiff will prevail ( P d ) times the expected award ( D d ) plus thedefendant's marginal costs of proceeding to the next stage of litigation ( C d ).
In the more developed models, several of the variables may be endogenouslydetermined. For example, both litigants' selections of C may affect their estimatesof the outcome, and one litigant's choice of C may affect the other litigant'sestimate of its own cost of proceeding to the next stage. Most analyses usesequencing models, for which the definition of marginal cost given in the text isthe most general case. In the most basic models, this cost is conceptualized asthe marginal cost of 'trial' over 'settlement,' though obviously it can begeneralized to any of the multiple stages of litigation, and can refer tocooperative, decisional, or unilateral withdrawal outcomes, as developed by Cornell (1990) . In processes without discrete formal stages, such as theAmerican discovery process and some Continental trial processes, the mostgeneral case will be continuous updating of NEV and EL as each new item ofinformation (e.g., each witness or investigation) becomes available.
In addition, the litigants can be influenced by effects external to the currentlitigation--for example, by the precedential or preclusive effects of the judgmentin the current litigation on future litigation. In such cases, a current plaintiff'sjudgment will produce an external gain to the plaintiff ( G p ) while the defendantwill suffer external loss ( L d ). Likewise, a defendant's judgment will produceexternal gain ( G d ) while the plaintiff will suffer an external loss ( L p ).
The NEV and EL are the primary determinants of the incentives given tolitigants in the economic model, including the amount of effort expended duringlitigation, the trial/settlement decision, the decision to file a suit, and thedecision to avoid behavior that would give rise to legal liability. Becauseprocedural rules alter the NEV and EL , these rules will have a central role indetermining litigation incentives and outcomes. Because decisions made atearlier stages of litigation are dependent upon the parties' expectations of theoutcomes (and their own and opposing parties' decisions) during later stages ofthe litigation, economic analysis begins from the last stage of trial and judgment,and proceeds by backward induction. Thus, we list and discuss topics in reversechronological order.
The last stage of a civil litigation in the court of first instance is the trial andjudgment ( Cooter and Rubinfeld (1990) ). This discussion suppresses thepossibility of appellate review, which in the U.S. federal system is governed bya separate set of Federal Rules of Appellate Procedure. Appellate review in theUnited States is concerned primarily with the correction of legal error andsecondarily with factual error. For a discussion of the economic analysis ofthose topics, see section [790] in this volume.
7. The Choice Between Judge and Jury Trials
Trials and judgments are governed by Sections VI and VII of the FRCP (Rules38-63). Subject to certain motions for the court to set aside the verdict (Rule 50)or order a new trial (Rule 59), judgment is entered as given by the factualfindings and legal conclusions of a judge (see Rule 52) or the verdict of a jury(Rule 58). The federal rules allow any party to demand a trial by jury of any issuetriable as a matter of federal constitutional right by a jury (Rule 38). Althoughmost American states also provide by state law or constitution for a right to trialby jury in some or all cases, the state courts generally are not bound by thefederal constitutional right to jury trial, except in certain cases where they areadjudicating federal claims for which federal law requires a right to jury trial. Rule39 allows the parties in these cases also to have a trial by the court, by jointconsent. Gay, Grace, Kale and Noe (1989) examine the choice between judge andjury under the assumption that juries are 'noisier' adjudicators than judges. Clermont and Eisenberg (1992) examine empirically whether the choice of judgeversus jury produces differing verdicts in product liability cases tried under statelaw, finding that--contrary to the popular belief--judges, not juries, are moregenerous to plaintiffs. Further, they do not find that these results are explainedby selection bias.
In addition to explicit choices by the parties, several of the Rules allow thejudge to exercise certain powers even when the case is tried by jury. Rule 49allows the court to require a jury to return a special verdict, which involvesexplicit findings upon each of several elements of the claim at issue rather thanallowing the jury to return the more common general verdict (see Lombadero(1996) , James, et al., (1992) at 377). Rule 50 provides for judgment as a matter oflaw, which can be used by the judge to preempt or overrule a jury upon thedetermination that, after being fully heard, there is no legally sufficient basis fora reasonable jury to find for a party on an issue (see McLauchlan (1973) ). Rule56 provides for an equivalent ruling in the pretrial stage by summary judgment,on the basis of pretrial discovery material and written submissions by the parties(see McLauchlan (1977) ), and Rule 12 permits a judgment as a matter of law atthe earlier pleading stage, in cases where the plaintiff's claim is legally deficienton its face.
8. Jury Structure and Decision Rule
The Rules also regulate the size and decision rule used by civil juries, as well asthe process through which jurors are selected. Rule 48 specifies that, unless theparties otherwise stipulate, a civil jury shall be not fewer than six nor more thantwelve, and that the verdict shall be unanimous. Economic analyses of jurydecision-making include an examination of how juries process information( Klevorick, Rothschild, and Winship (1984) , Froeb and Kobayashi (1996) ), andthe effect of jury size and alternative decision rules ( Klevorick and Rothschild(1979) ). Finally, Rule 47 (as supplemented by federal statutes) controls theselection of jurors, including the procedures for examination of jurors during theselection process, and the use of peremptory challenges (see, e.g., Schwartz andSchwartz (1996) ).
A separate literature has bypassed explicit consideration of the jury versusjudge decision-making process by modeling the outcome of a trial as beingdetermined by the litigants' expenditures on litigation. The most common modelof litigation expenditures is where the both litigants expend resources to alter theprobability of prevailing. (see Posner (1973) , Goodman (1978) , Tullock (1980) , Wittman (1988) , Katz (1988) , Hay (1995) , Kobayashi and Lott (1996) . That is, inthese models, the marginal cost of future litigation stages C p and C d , (usuallyconceptualized as 'trial versus settlement') are endogenous choice variables thatdetermine the probability that the plaintiff will prevail P(C p ,C d ). The equilibriumamounts of litigation expenditures depend upon the relative stakes of the parties,and upon the relative merits of the case. The litigation expenditures andprobability determined by solving for the Nash equilibria are used as theexpected values for earlier stages of litigation. Other articles have examined therelationship between the burden of evidence or decision standard and litigationexpenditures. In these models, litigation expenditures that allow a litigant to meetthe burden of proof or decision standard serve as a costly signal of liability (see,e.g., Rubinfeld and Sappington (1987) ).
10. The Trial/Settlement Decision
The major decision preceding commencement of a trial is the decision whetherto settle the case or proceed to trial. The relative magnitudes of plaintiff's NEV and the defendant's EL are the primary determinants of whether a case settles orwhether trial occurs. As noted above, this modeling can be generalized to anystage preceding a decision by the court, or a further commitment to incurlitigation expense. Under risk neutrality, the NEV sets the plaintiff's minimumacceptable settlement offer and the EL the defendant's maximum settlement bid.In the absence of lawyer-client agency costs, a sufficient (but not necessary)condition for litigation is the perceived absence of a bargaining range, whichoccurs when the plaintiff's minimum acceptable offer is greater than thedefendant' maximum bid, i.e., NEV > EL , or equivalently:
(P p (D p + G p + L p ) - P d (D d + L d +G d ) + G d - L p > C p + C d (1)
The above condition identifies two reasons why parties choose to foregosettlement and proceed to trial. The first is based on prediction failure. Thesecond is based on consideration of external effects, specifically precedential orpreclusive effects of the current litigation on future litigation.
11. The Prediction Failure Model
Under the simplifying assumptions that the litigants have symmetric stakes ( D p = D d = D ) and that there are no external effects ( L d = L p = G d = G p = 0 ), thecondition for trial rather than settlement reduces to the following expression:
(P p - P d )D > C p + C d (2)
This condition illustrates the optimism model of litigation. In such a model,settlement fails to occur because of prediction failure -- that is, settlement failsbecause the parties have mutually inconsistent and relatively optimisticestimates of the probability that the plaintiff will prevail (i.e., P p > P d ). Thelitigants' erroneous predictions lead them to behave as if there were no room fora mutually beneficial settlement.
12. The Priest-Klein Selection Model
Economists also have modeled the process through which such mutuallyinconsistent and optimistic predictions are generated. The Priest and Klein(1984) model of case selection is based on the optimism model, and has twomajor hypotheses. The first and more general hypothesis is that the casesselected for trial are not representative of the population of disputes.Specifically, under the assumptions of symmetric stakes and specificdistributional assumptions about the litigants' estimates of P (specifically thateach litigant's estimate of P is an independent draw from a unimodal distributioncentered around the true P ), the basic Priest-Klein model predicts that adisproportionate number of cases selected for trial will come from cases that areclose to the decision standard. The second hypothesis is a specific predictionfor observed case outcomes in the limiting case where the litigants accuratelyestimate P . Priest and Klein show that under these circumstances thedistribution of filed cases around the decision standard becomes approximatelysymmetric, and the generated plaintiff win rate approximately equals fiftypercent.
A large number of articles have examined the limiting prediction of a fiftypercent win rate, and have presented evidence where the win rate differs fromfifty percent. See, e.g., Eisenberg (1990) , Hylton (1993) , Wittman (1985) , Priest(1985) , Ramsayer and Nakazato (1989) , Shavell (1996) , Thomas (1995) , Waldfogel(1995) . See Kobayashi (1996) and Kessler, Meites, and Miller (1996) for a recentsurveys of the literature. While generally rejecting the specific fifty percenthypothesis, this evidence may simply reflect the fact that the assumptionsunderlying the limiting case do not hold. Further, empirical studies examining themore general predictions of the Priest-Klein model have found evidenceconsistent with model (see Kobayashi (1996) ).
13. Settlement Failure and Discovery
Because the prediction failure model predicts settlement failure because litigantslack information at the time of the final trial/settlement decision, it suggestsprocedural reforms aimed at increasing pre-trial information. The management ofpre-trial information is addressed in Section V of the FRCP (Rules 26-37). Theprimary rule is Rule 26, which contains the general provisions governing civildiscovery. Under Rule 26, litigants are required to respond to requests forinformation by the adverse party, on the theory that such requests andresponses would increase pre-trial information and increase settlement andaccuracy in adjudication. However, economic models of discovery have pointedout several problems with the rules. First, the rules shift the costs of gatheringinformation from the requesting to the responding party, and thereby introduceboth a potential moral-hazard problem and strategic behavior into the demandfor pretrial discovery. Because the costs of responding to a discovery requestare, in many cases, larger that the cost of making a request, this externalizationpredicts that parties will request information well past the point where themarginal value of information outweighs the marginal costs of gathering theinformation. In addition, the process of discovery can decrease, rather thanincrease, settlement by making parties more optimistic (see Cooter and Rubinfeld(1994) ). Finally, discovery can potentially decrease the amount of information inlitigation by providing disincentives for the production and retention ofinformation that might be subject to extensive legal discovery (see Kobayashi,Parker and Ribstein (1996) ). See also Hay (1994) and Sobel (1989) .
14. Amendments to the Discovery Rules
The perceived problems of 'overdiscovery' predicted by the economic model oflitigation have been addressed in several amendments to the discovery rules. In1983, Rule 26(b) was amended to embody an explicit cost-benefit test that couldbe applied by the judge to limit discovery. At that same time FRCP 16 wasamended to expand the judge's power to manage the pretrial process in general.However, the economic model suggests that these managerial solutions may beinferior to forcing each litigant to internalize the costs of its own informationrequests, or at least to pay for the marginal cost of extensive discovery requests( Cooter and Rubinfeld (1994) ).
In 1993, Rule 26 was further amended, again in response to concernsregarding litigants' overinvestment in discovery activity. However, the majorchange to the rules was to institute a regime of initial disclosures to be madewithout any request for information from the adverse party (see FRCP Rule 26a, Brazil (1978) , Schwarzer (1989) , Cooter and Rubinfeld (1995) ). Applying theeconomic model, this change is likely to make matters worse. To the extent thatcost-shifting is the source of 'discovery abuse,' these rules exacerbate theproblem by allowing the requesting party to externalize the costs of bothrequesting and responding to requests for information. This effect is magnifiedby abandonment of code pleading in favor of the broad notice pleading rulescontained in the FRCP (Section III, Rules 7-15), (see Epstein (1973a, 1973b, 1974, 1986, Posner (1973) , Katz (1990) , Bone (1997) ). Further, to the extent that this rulemoves the costs of pretrial discovery into an earlier phase of the litigation, thismay have the effect of increasing total costs, and decreasing the marginal costsof trial over settlement. The 1993 amendment was subject to a local option in U.S.federal districts, which has reduced some of the effects of the rule change.Empirical analysis has shown that the busiest federal districts have opted out ofthe new rule. ( Kobayashi, et. al. (1996) ).
Relative optimism is not the only way in which to generate the absence of aperceived bargaining range. The existence of external effects can cause litigationto occur even if the parties to the litigation agree on the likely outcome of thecase. Examples of external effects include the precedential and preclusive effectof litigation, both of which serve to affect litigants' prospects in future cases (see Rubin (1977) , Galanter (1974), Che and Yi (1993) , and Kobayashi (1996) . See also Blume and Rubinfeld (1982) , Priest (1987 , 1980) , Cooter (1987) , Galanter (1987) , Landes and Posner (1979) ). For a more complete discussion of precedent andlegal change, see Sections [9000-9900] of this volume.
To illustrate this point, consider the case with symmetric stakes and wherethe litigants agree on the probability the plaintiff will prevail, i.e., P p = P d = P. According to the simple optimism model, such a case will settle in order to savethe costs of a trial. However, even under these assumptions, litigation may begenerated if the current case has implications for future behavior of the litigantsinvolved. The NEV of the lawsuit to the plaintiff equals P(D +G p ) - (1-P)L p - C p , and the defendant's EL = P(D+L d ) - (1-P)G d + C d . The condition for litigation NEV > EL becomes:
P(G p - L d ) + (1-P)(G d - L p ) > C d + C p (3)
Condition (3) shows that, even when the prospective outcome of a trial isagreed upon by the parties, trials can be generated when the external gains tothe winning litigant outweigh the external losses to the losing litigant. Incontrast to the sources of trial in the prediction failure and settlement failuremodels (where information costs prevent litigants from achieving a settlementwithin an existing bargaining range), external effects cause trials by preventingthe existence of a bargaining range due to asymmetries in external effects.Because no mutually beneficial bargain is foregone, these trials are not a failure.In fact, the existence of external effects focuses on the positive and valuablerulemaking function of trials.
16. External Effects and Procedural Rules
The model of trial based on external effects also suggests the relevance of adifferent set of procedural rules - one that focuses on the effects of litigation onfuture claims and third parties. The FRCP addresses the packaging of claims andparties generally in Rules 13-14 and 17-25. These Rules serve as inclusivepackaging devices, which operate by giving litigants incentives andopportunities to join parties and claims in order to internalize external effects andto achieve economies of scale in litigation. These Rules include the permissivejoinder rules (Rule 18-20), impleader (Rule 14), interpleader (Rule 22), intervention(Rule 24), the rule governing counterclaims (Rule 13), and the rule governingclass actions (Rule 23). For an economic analysis of counterclaims, see Landes(1994) . For a discussion of various aspects of class actions, see Bernstein (1978) , Dam (1975) , Rosenefeld (1976) , Friedman (1996) , and Section [7600] of thisvolume.
17. Common Law Packaging Rules
A second major category of packaging rules include the common law rules ofprecedent, or stare decisis, and the rules of preclusion, or the law of res judicata.The common law rules of res judicata include the doctrines of claim preclusion(also known as merger and bar) and issue preclusion (also known as collateralestoppel). Under the rule of claim preclusion, parties or their privies (i.e.,predecessors or successors in interest) are precluded from relitigating issuesthat were or could have been raised in the first action (see , e.g., Kobayashi(1996) , Landes and Posner (1994) ). Claim preclusion prevents the splitting ofclaims based on the same out-of-court transaction, thus functioning asmandatory joinder-of-claims rules by their prospective effect on future litigation.In contrast, issue preclusion (collateral estoppel) is limited to issues that wereactually litigated, actually decided, and necessary to the judgment to in the firstcase. In addition, while application of claim preclusion is generally limitedsymmetrically to persons who were either parties or successors to parties onboth sides of the initial litigation, collateral estoppel can operatenon-symmetrically, or, as it is termed in legal doctrine, non-mutually, in the sensethat collateral estoppel can operate in favor of strangers to the first action, butcan operate against only parties or their successors. (See Spurr (1991) , Hay(1993) ). The existence of non-party preclusion has led to the attempted use ofsettlement conditioned on vacatur (the eradication of a prior public decision) asa means to eliminate the effect of preclusion. See Fisch (1991) .
18. Offensive Non-Mutual Collateral Estoppel
To see the effect of the application of non-mutual collateral estoppel, considerthe case where a single defendant faces two different plaintiffs sequentially.Suppose for simplicity that both cases turn on a single issue that determines theoutcome. First consider offensive collateral estoppel. If the first plaintiff prevailsagainst the defendant, the defendant is precluded from relitigating the decisiveissue against the second plaintiff. Thus, a loss in the first case results in the lossof both cases, and the external effect L d = (1-P)D . In contrast, a win by thedefendant against the first plaintiff does not preclude the second plaintiff fromrelitigating the issue, if the second plaintiff is neither a party nor a privy to thefirst action. Thus, the only effect on the second litigation would be theprecedential gain G d = dP D ), where dP equals the change in P in the secondlitigation. If there are no novel issues of law, this gain is likely to be close tozero. And under the assumption that the plaintiffs are not repeat litigants, L p =G p = 0 .
Substituting into the condition for litigation (equation (3)) yields:
(1-P)D(dP - P) > C d + C p (4)
If the precedential change dP is close to zero, condition (4) is unlikely to besatisfied. Thus, there will be little incentive to take such cases to trial. Thisincentive for settlement has led some to object to offensive non-mutual collateralestoppel on the grounds that such a rule will allow plaintiffs to repeatedly extractlarge settlements from a common defendant. However, the total effect onsettlement amounts from such a rule is unclear (see Hay (1993) ). First, the effectof estoppel causes the repeat litigant to capitalize all future litigation into the firstlitigation. This increase in the stakes causes the repeat litigant to spend a largeramount of resources when he goes to trial. This has the effect of lowering P ,thus moving the bottom of the bargaining range downward. Further, the repeatlitigant is likely to take a harder bargaining stance in the first litigation byanticipating its effects on future litigation.
19. Defensive Non-Mutual Collateral Estoppel
In contrast, consider the use of defensive non-mutual collateral estoppel withmultiple plaintiffs. Again, assume that L p = G p = 0 . Now L d = dP D and G d = PD .Substitution into the condition for litigation (equation (3)) yields:
PD ((1-P) - dP) > C d + C p (5)
In contrast to the rule of offensive non-mutual collateral estoppel withmultiple plaintiffs, such a rule increases the likelihood of litigation. In addition,use of such a rule would apply preclusion against a non-party that wasrepresented by a party in the first litigation with low relative stakes, which mayincrease legal error and increase the amount of litigation (see Spurr (1991) ). Thus,the Court's rejection of the latter rule because of due process concerns isconsistent with the predictions of economic analysis.
C. The Bargaining Failure Model and Asymmetric Information
Even within the basic optimism model of litigation, condition (2) is not anecessary condition for litigation. Even if a positive bargaining range isperceived to exist, the parties may fail to settle due to bargaining failure (see,e.g., Cooter, Marks and Mnookin (1982) , Gross and Syverud (1991) , Shavell(1993) ) or due to the existence of asymmetric information (see, e.g., Bebchuk(1984) , Daughety and Reinganum (1993) ), P'ng (1983, 1987) , Wang, et al. (1994) , Schweizer (1989) , Froeb (1993) , Spier (1992 , 1994) ). In the former case the litigantsfail to agree on a specific bargain even if both litigants agree that a positivebargaining range exists. In the latter case, trials are a necessary cost of avoidingadverse selection problems. In both of these cases, the potential for costly trialsrepresents a calculated cost of strategic behavior aimed at obtaining a betterexpected settlement.
21. Bargaining Failure and Procedural Rules
The existence of asymmetric information in litigation again points to thediscovery rules (see the discussion in part b, supra). In addition, economistshave examined procedural rules that would increase the incentives forsettlement. Under FRCP Rule 68, the defendant can make an offer of judgment.If this offer is not accepted by the plaintiff, and the subsequent judgment is lessfavorable to the plaintiff, the plaintiff is responsible for the defendant's costsafter making the offer (see Anderson (1994) , Anderson and Rowe (1996) , Miller(1986) , Chung (1996) ). However, liberal and early use of Rule 68 is limited by therequirement that the defendant offer not merely settlement but judgment, whichcan have a preclusive effect in subsequent litigation. Further, under the currentRules, it does not allow the plaintiff to recover marginal fees (although manystatutes provide for one way fee recovery by plaintiffs). In addition, economistshave analyzed contractual settlement devices such as settlement escrows (see.,e.g., Gertner and Miller (1995) ), and the use of mediation and arbitrationtechniques (see Shavell (1995) ).
D. Lawyer-Client and Client-Client Agency Costs
22. Lawyer-Client Agency Costs
Finally, trials can be generated due to agency costs between lawyer and clientand by agency problems between co-interested clients. A large literature hasmodeled the consequence of attorney compensation arrangements that give risethe agency problems in settlement (see, e.g., Miller (1987) ). Articles examiningthe incentive effects of contingent fees include, Watts (1994) , Thomason (1991) , Dana and Spier (1993) , Danzon (1983) , Hay (1996, 1997) , Lynk (1990, 1994) , Miceliand Sergson (1991) , Miceli (1994) , Rubinfeld and Scotchmer (1993) , and Clemontand Currivan (1978) ). Potential solutions to such problems include enforcementof ethical rules or the use of reputational mechanisms (see Gilson and Mnookin(1984), Smith and Cox, (1985) , Yang (1996) ).
23. Contribution, Indemnity, and Agreements with Multiple Defendants
Similarly, litigation and settlement are affected by the rules which allocateliability among multiple defendants. These include the rules of contribution andindemnity (see Hause (1989) , Landes and Posner (1980) , Easterbrook, Landes,and Posner (1980) , Kornhauser and Revesz (1989 , 1990 , 1994) ), Klerman (1996) ),and agreements between plaintiffs and defendants (see Bernstein and Klerman(1995) ).
E. Effect of the Decision to File a Suit and the Decision to Avoid a Lawsuit
24. Incentives to Avoid Litigation
Finally, the NEV and the EL provide incentives during the earlier stages oflitigation. The EL , discounted by the probability that a suit will be filed and bythe likelihood of settlement, provides deterrence of and incentives for avoidanceof behavior subject to legal liability. ( Polinsky and Rubinfeld (1988a , 1988b ), Cooter and Rubinfeld (1989) ). See also Ordover (1978 , 1981) and Hylton (1990) .
25. The Decision to File a Lawsuit
Similarly, the NEV of a lawsuit is a primary determinant of whether or not aplaintiff chooses to file a suit. While many analyses of litigation limit theirexamination of legal claims to those whose NEV is positive, this is not anecessary condition for a suit to be filed. Negative NEV suits may also be filedin order to extract a settlement, and such strategies can be successful when thethreat to litigate is credible (see Bebchuk (1996) , Nalebuff (1987) , Bebchuk (1988) , Rosenberg and Shavell (1985) , Katz (1990) , Klein (1990) , Bone (1997) , and Miceli(1993) ). For general analyses of the relationship between the cost of litigationand private and social incentive to bring a suit, see Hazard (1989) , Menell (1983) , Priest (1982) , Schwartz and Tullock (1975) , Shavell (1982) , Trubek, et al. (1983) , Williams and Williams (1994) , Rose-Ackerman and Geistfeld (1987) , Kaplow(1986) , and Gross (1987) .
26. The Role of Sequencing of and Exit from Litigation
Perhaps the one of the most salient features of the FRCP, and one that has beenonly recently addressed by the economics literature, is the effect of the rules onthe timing and sequencing of litigation. While many economic models treatlitigation as a timeless decision, the procedural rules lay out a sequence ofevents that determine how litigation will proceed over time. The timing andsequence of litigation has been shown to have important implications for the NEV of a lawsuit and the behavior of litigants.
For example, the ability of litigants to sequentially litigate motions or toseparate liability and damage phases of trials have been shown to affect both thecost of litigation and the value of the litigation if litigants are allowed to exit.Sequencing with easy exit increases the 'option' value of litigation by allowingplaintiffs to avoid conditional negative NEV outcomes by exiting the litigation.(See Cornell (1990) , Landes (1993) , Chen, et al. (1997) ). In addition, the ability totake motions sequentially can affect the credibility of negative expected valuesuits (Bebchuk 1996) .
Under the FRCP, exit is controlled by Rule 41. Under Rule 41, the plaintiff canunilaterally dismiss an action without order of the court at any time before theadverse party answers. After this, dismissal requires mutual stipulation by allparties, or an order of the court. The application of Rule 41 is a prime example ofthe tension between the ex-ante and ex-post effects of procedural rules. Ex-post,it is unlikely that a defendant will prevent a plaintiff from abandoning a claim.However, the willingness of the court or the adverse party to allow the plaintiffto easily exit the litigation may be the primary reason the suit was filed in the firstplace.
The FRCP address this inability to commit through Rule 11, which allows thecourt to impose sanctions on parties and their attorneys for filing frivolous suits.This rule addresses the commitment problem by allowing the motion forsanctions to survive the dismissal or mooting or the original claim. Thus, Rule11 allows the motion for sanction to survive as separate action with thesanctions as the incentive to litigate. Economic analyses of sanctions under Rule11 include Bebchuk and Chang (1996) , Polinsky and Rubinfeld (1993) , Bone(1997) , and Kobayashi and Parker (1993) .
However, recent amendments to Rule 11 may have reduced the value of Rule11 as a commitment device. In the 1993 Amendments to the FRCP, the rules wereamended to allow the a litigant twenty-one days to withdraw his pleading uponbeing served with a Rule 11 motion by the adverse litigant. In essence, the newrules allows for free exit, and thus weaken the commitment and deterrent effectof the rules. While the amendments to Rule 11 were designed in large part todecrease the volume of 'satellite' litigation over alleged Rule 11 violations, theeffect of the rule change may be to increase the number of filed cases, the rateof Rule 11 challenges, and total litigation costs (Kobayashi and Parker (1993)) .
Economists have also examined the use of two-way fee shifting (often referredto in America as the 'English' rule, in contrast with the general 'American' rulethat each party bears its own fees, regardless of outcome) to deter low ornegative value lawsuits. Because two-way fee shifting imposes extra costs onthe losing party, it disproportionately affects low probability lawsuits (see Shavell (1982) ). However, the FRCP has not incorporated two way shifting offees and costs, and state experiments have not proven successful or long lived(see Snyder and Hughes (1990) , Hughes and Snyder (1995) ). In addition, almostall fee shifting statutes require the imposition of a judgment. Thus, the use of feeshifting would not necessarily reduce the option value of litigation. That is, ifexit is routinely allowed prior to judgment, fee shifting will not serve as adeterrent. Indeed, to the extent that two way fee shifting would increase thevariance in final outcomes, use of such a system would increase the option valueof litigation, and thereby increase the supply of filed cases (Cornell (1990)) . Fora more complete discussion of fee shifting, see Section [7300] of this volume. Seealso, Katz (1987) , Plott (1987) , Spier (1994) , Reinganum and Wilde (1986) , Bowles(1987) , Braeutigam, et al. (1984) , Dewees et al. (1981) , Donohue (1991) , Graville(1993) , and Katz and Beckner (1995) .
29. The Process of Procedural Rulemaking
Finally, both the process of procedural rulemaking and the adversarial systemitself have been the subject of economic analyses. Indeed, the controversy overthe relative merits of party-controlled adversarial presentation and a more'managerial' system of litigation was at the heart of the controversial amendmentsto the discovery rules, and has been the subject of debate in the academicliterature (see Tullock (1980 , 1988) , Langbein (1985) , McChesney (1979)) . For arecent report of experimental results, see Block, et. al. (1996) . For a public choicetreatment of the common law of procedural rules, see Macey (1994) .
The controversy over the recent amendments to Rule 11 and 26a have drawnattention to the process through which the rules are revised (see Kobayashi andParker (1993) , Kobayashi, et al. (1996)) , and have highlighted the lack of empiricalevidence on the performance of procedural rules and systems (see, e.g., Walker(1994) , Galanter (1983) ). Indeed, the amendment to Rule 26a, which allowsindividual district courts to opt-out of the discovery rules, the Civil JusticeReform Act of 1990, which encouraged local variations in each district, andvariation in local Federal Court rules and state court rules all provide substantialchallenges to the traditional centralized system of rulemaking that existed in thefederal system prior to 1990 (see Kobayashi, et al. (1996) , Solimine and Pacheco(1997) , and Subrin (1989) ).
Bibliography on Civil Procedure : General (7000)
Anderson, David A.(1994) , 'Improving Settlement Devices: Rule 68 and Beyond,' 23 Journal
of Legal Studies , 225-246.
Anderson, David A., and Rowe, Thomas D.(1996) , 'Empirical Evidence on SettlementDevices: Does Rule 68 Increase Settlement?' 71 Chicago-Kent Law Review , 519-545.
Bebchuk, Lucian A.(1996) , 'A New Theory Concerning the Credibility and Success ofThreats to Sue,' 25 Journal of Legal Studies , 1-26.
Bebchuk, Lucian A.(1988) , 'Suing Solely to Extract a Settlement Offer,' 17 Journal of LegalStudies , 437-450.
Bebchuk, Lucian A.(1984) , 'Litigation and Settlement Under Imperfect Information,' 15 RAND Journal of Economics , 404-415.
Bebchuk, Lucian A., and Chang, Howard F.(1996) , 'An Analysis of Fee Shifting Based on theMargin of Victory: On Frivolous Suits, Meritorious Suits, and the Role of Rule 11,' 25 Journal of Legal Studies , 371-404.
Bernstein, Roger (1978) , 'Judicial Economy and Class Actions,' 7 Journal of Legal Studies ,349-370.
Bernstein, Lisa and Klerman, Daniel (1995) , 'An Economic Analysis of Mary CarterSettlement Agreements,' 83 Georgetown Law Journal , 2215-2270.
Block, Michael, and Parker, Jeffrey S.(1996) , 'Some Experimental Evidence of theEfficiency of the Adversarial System,' mimeo, George Mason University School of Law .
Blume, Lawerence E. and Rubinfeld, Daniel L.(1982) , 'The Dynamics of the Legal Process,' 11 Journal of Legal Studies , 405-419.
Bone, Robert G.(1997) , 'Modeling Frivolous Suits,' 145 University of Pennsylvania LawReview , 519-605.
Bowles, Roger A.(1987) , 'Settlement Range and Cost Allocation Rules,' 3 Journal of Law,Economics & Organization , 177-184.
Braeutigam, Ronald, Owen, Bruce, and Panzar, John(1984) , 'An Economic Analysis ofAlternative Fee Shifting Systems,' 47 Law and Contemporary Problems , 173-185.
Brazil, Wayne D.(1978) , 'The Adversary Character of Civil Discovery: A Critique andProposals for Change,' 31 Vanderbilt Law Review , 1295-1361.
Che, Yeon-Koo, and Yi, Jong Goo(1993) , 'The Role of Precedents in Repeated Litigation,' 12 Journal of Law, Economics & Organization , 399-424.
Chen, Kong-Pin, Chien, Hung-Ken, and Chu, C. Y. Cyrus(1997) , 'Sequential versus UnitaryTrials with Asymmetric Information,' 26 Journal of Legal Studies , 239-258.
Chung, Tai-Yeong (1996) , 'Settlement of Litigation under Rule 68: An Economic Analysis,' 25 Journal of Legal Studies , 261-286.
Clermont, Kevin M., and Currivan, John D. (1978) , 'Improving the Contingent Fee,' 63 Cornell Law Review , 529-599.
Clermont, Kevin M. and Eisenberg, Theodore (1992) , 'Trial by Jury or Judge: TranscendingEmpiricism,' 77 Cornell Law Review , 1124-1187.
Cooter, Robert D. (1987) , 'Why Litigants Disagree: A Comment on George Priest's'Measuring Legal Change',' 3 Journal of Law, Economics and Organization , 227-234.
Cooter, Robert D., Marks, Stephen, and Mnookin, Robert (1982) , 'Bargaining in the Shadowof the Law: A Testable Model of Strategic Behavior,' 11 Journal of Legal Studies ,225-251.
Cooter, Robert D., and Rubinfeld, Daniel L. (1990) , 'Trial Courts: An Economic Perspective' 24 Law and Society Review , 533-548.
Cooter, Robert D. and Rubinfeld, Daniel L.(1994) , 'An Economic Model of Legal Discovery', 23 Journal of Legal Studies , 435-463.
Cooter, Robert D. and Rubinfeld, Daniel L.(1989) , 'Economic Analysis of Legal Disputes andTheir Resolution,' 27 Journal of Economic Literature , 1067-1097; reprinted in RichardA. Posner and Francesco Parisi, eds., Law and Economics (Edward Elgar, 1996forthcoming).
Cooter, Robert D. and Rubinfeld, Daniel L.(1995) , 'Reforming to New Discovery Rules,' 84 Georgetown Law Journal , 61-89.
Cornell, Bradford (1990) , 'The Incentive to Sue: An Option Pricing Approach,' 19 Journalof Legal Studies , 173-187.
Dam, Kenneth W.(1975) , 'Class Actions: Efficiency, Compensation, Deterrence, andConflict of Interest,' 4 Journal of Legal Studies , 47-73.
Dana, James D., and Spier, Kathryn E.(1993) , 'Expertise and Contingent Fees: The Role ofAsymmetric Information in Attorney Compensation,' 9 Journal of Law, Economics &Organization , 349-367.
Danzon, Patricia M.(1983) , 'Contingency Fees for Person Injury Litigation,' 14 Bell Journalof Economics , 213-224.
Danzon, Patricia, M, and Lillard, Lee (1983) , 'Settlement Out of Court: The Disposition ofMedical Malpractice Claims,' 12 Journal of Legal Studies , 345-377.
Daughety, Andrew F., and Reinganum, Jennifer F.(1993) , 'Endogenous Sequencing in Modelsof Settlement and Litigation,' 9 Journal of Law, Economics, & Organization , 314-348.
Dewees, Donald N., Prichard, J. Robert S., and Trebilcock, Michael J.(1981) , 'An EconomicsAnalysis of Cost and Fee Rules for Class Actions,' 10 Journal of Legal Studies , 155-185.
Donohue, III, John J.(1991) , 'The Effects of Fee Shifting on the Settlement Rate:Theoretical Observations on Costs, Conflicts and Contingency Fees,' 54 Law andContemporary Problems , 195-222.
Easterbrook, Frank H., Landes, William M. and Posner, Richard A.(1980) , 'Contributionamong Antitrust Defendants: A Legal and Economic Analysis,' 23 Journal of Law andEconomics , 331-370.
Eisenberg, Theodore (1990) , 'Testing the Selection Effect: A New Theoretical Frameworkwith Empirical Tests,' 19 Journal of Legal Studies , 337-358.
Epstein, Richard A.(1986) , 'The Temporal Dimension in Tort Law,' 53 University ofChicago Law Review , 1175-1218.
Epstein, Richard A.(1974) , 'Defenses and Subsequent Pleas in a System of Strict Liability,' 3 Journal of Legal Studies , 165-216.
Epstein, Richard A.(1973a) , 'A Theory of Strict Liability,' 2 Journal of Legal Studies ,151-204.
Epstein, Richard A.(1973b) , 'Pleadings and Presumptions,' 40 University of Chicago LawReview , 556-582.
Fisch, Jill E.(1991) , 'Rewriting History: The Propriety of Eradicating Prior Decisional LawThrough Settlement Conditioned on Vacatur,' 76 Cornell Law Review , 589-642.
Friedman, David D.(1996) , 'More Justice for Less Money,' 39 Journal of Law & Economics ,211-240.
Froeb, Luke M.(1993) , 'The Adverse Selection of Cases for Trial,' 13 International Reviewof Law and Economics , 317-324.
Froeb, Luke M., and Bruce H. Kobayashi(1996) , 'Naive, Biased, Yet Bayesian: Can JuriesInterpret Selectively Produced Evidence?', 12 Journal of Law, Economics &Organization , 257-276.
Galanter, Marc (1987) , 'Conceptualizing Legal Change and its Effects: A Comment onGeorge Priest's 'Measuring Legal Change',' 3 Journal of Law, Economics andOrganization , 235-242.
Galanter, Marc (1974) , 'Why the 'Haves' Come Out Ahead: Speculations on the Limits ofLegal Change,' 9 Law and Society Review , 95-160.
Galanter, Marc (1983) , 'Reading the Landscape of Disputes: What We Know and Don'tKnow (And Think We Know) About our Allegedly Contentious and Litigious Society,' 31 UCLA Law Review , 4-71.
Gay, Gerald D., Grace, Martin F., Kale, Jayrant R. and Noe, Thomas H.(1989) , 'Noisy Juriesand the Choice of Trial Mode in a Sequential Signalling Game: Theory and Evidence,' 20 RAND Journal of Economics , 196-213.
Gertner, Robert H. and Miller, Geoffrey P.(1995) , 'Settlement Escrows,' 24 Journal of LegalStudies , 87-122.
Gilson, Ronald and Mnookin, R.(1984) , 'Disputing through Agents: Cooperation andConflict Between Lawyers in Litigation,' 94 Columbia Law Review , 509-566.
Goodman, John C.(1978) , 'An Economic Theory of the Evolution of the Common Law,' 7 Journal of Legal Studies , 393-406.
Gould, John P.(1973) , 'The Economics of Legal Conflicts,' 2 Journal of Legal Studies ,279-300.
Graville, H. S. E.(1993) , 'The Efficiency Implications of Cost Shifting Rules,' 13 International Review of Law and Economics , 3-18.
Gross, Samuel R.(1987) , 'The American Advantage: The Value of Inefficient Litigation', 85 Michigan Law Review , 734-757.
Gross, Samuel R. and Syverud, K. D.(1991) , 'Getting to No: A Study of SettlementNegotiations and the Selections of Cases for Trial,' 90 Michigan Law Review , 319-393.
Hause, J. C.(1989) , 'Indemnity, Settlement, and Litigation, or I'll be Suing You,' 18 Journalof Legal Studies , 157-179.
Hay, Bruce L.(1994) , 'Civil Discovery: Its Effects and Optimal Scope', 23 Journal of LegalStudies , 481-515.
Hay, Bruce L.(1997) , 'Optimal Contingent Fees in a World of Settlement,' 26 Journal ofLegal Studies , 259-278.
Hay, Bruce L.(1996) , 'Contingent Fees and Agency Costs,' 25 Journal of Legal Studies ,503-533.
Hay, Bruce L.(1993) , 'Some Settlement Effects of Preclusion,' 1993 University of IllinoisLaw Review , 21-51.
Hay, Bruce L.(1995) , 'Effort, Information, Settlement, Trial,' 24 Journal of Legal Studies , 29-62.
Hazard, Geoffrey C., Jr.(1989) , 'Authority in the Dock,' 69 Boston University Law Review ,469-476.
Hughes, James W., and Snyder, Edward A.(1995) , 'Litigation and Settlement under theEnglish and American Rules: Theory and Evidence,' 38 Journal of Law and Economics , 225-250.
Hylton, Keith N.(1990) , 'The Influence of Litigation Costs on Deterrence under StrictLiability and under Negligence,' 10 International Review of Law and Economics ,161-171.
Hylton, Keith N.(1993) , 'Asymmetric Information and the Selection of Cases forLitigation,' 22 Journal of Legal Studies , 187-210.
James, Fleming, Hazard, Geoffrey C., and Leubsdorf, J.(1992) , Civil Procedure , Boston,Little Brown.
Kaplow, Louis (1986) , 'Private versus Social Costs in Bringing Suit,' 15 Journal of LegalStudies , 371-385.
Katz, Avery (1990) , 'The Effect of Frivolous Lawsuits on the Settlement of Litigation,' 10 International Review of Law and Economics , 3-27.
Katz, Avery (1987) , 'Measuring the Demand for Litigation: Is the English Rule ReallyCheaper?' 3 Journal of Law, Economics and Organization , 143-176.
Katz, Avery, and Beckner, Clinton F.(1995) , 'The Incentive Effects of Litigation FeeShifting when Legal Standards are Uncertain', 15 International Review of Law andEconomics , 205-224.
Katz, Avery (1988) , 'Judicial Decisionmaking and Litigation Expenditure,' 8 InternationalReview of Law and Economics , 127-143.
Kessler, Daniel, Meites, Thomas, and Miller, Geoffrey (1996) , 'Explaining Deviations fromthe Fifty-Percent Rule: A Multimodal Approach to the Selection of Cases forLitigation,' 25 Journal of Legal Studies , 233-260.
Klein, Cristopher C.(1990) , 'Predation in the Courts: Legal Versus Economic Analysis inSham Litigation Cases,' 10 International Review of Law and Economics , 29-40.
Klerman, Daniel (1996) , 'Settling Multidefendant Lawsuits: The Advantage of ConditionalSetoff Rules,' 25 Journal of Legal Studies , 445-462.
Klevorick, Alan, and Michael Rothschild (1979) , 'A Model of the Jury DecisionmakingProcess,' 8 Journal of Legal Studies , 141-164.
Klevorick, Alan, Rothschild, Michael, and Winship, C.(1984) , 'Information Processing andJury Decision Making,' 23 Journal of Public Economics , 141-164.
Kobayashi, Bruce H.(1996) , 'Case Selection, External Effects, and the Trial/SettlementDecision,' in Anderson, David A. (ed.), Dispute Resolution: Bridging the Settlement Gap ,JAI Press, 17-49.
Kobayashi, Bruce H. and Lott, John R., Jr.(1996) , 'In Defense of Criminal DefenseExpenditures and Plea Bargaining,' 16 International Review of Law and Economics ,397-416.
Kobayashi, Bruce H. and Parker, Jeffrey S.(1993) , 'No Armistice at 11: A Commentary onthe Supreme Court's 1993 Amendments to Rule 11 of the Federal Rules of CivilProcedure,' 3 Supreme Court Economic Review , 93-152.
Kobayashi, Bruce H., Parker, Jeffrey S., and Ribstein, Larry E.(1996) , 'The Process ofProcedural Reform: Centralized Uniformity versus Local Experimentation,' GeorgeMason University School of Law Working Paper.
Kornhauser, Lewis, and Revesz, Richard (1994) , 'Multi-Defendant Settlements: The Impactof Joint and Several Liability,' 23 Journal of Legal Studies , 41-76.
Kornhauser, Lewis, and Revesz, Richard (1989) , 'Sharing Damages Among MultipleTortfeasors,' 98 Yale Law Journal , 831-884.
Kornhauser, Louis, and Revesz, Richard (1990) , 'Apportioning Damages among PotentiallyInsolvent Actors,' 19 Journal of Legal Studies , 617-651.
Landes, William M.(1971) , 'An Economic Analysis of the Courts,' 14 Journal of Law andEconomics , 61-107.
Landes, William M.(1994) , 'Counterclaims: An Economic Analysis,' 14 International Reviewof Law and Economics , 235-244.
Landes, William M.(1993) , 'Sequential versus Unitary Trials: An Economic Analysis,' 22 Journal of Legal Studies , 99-134.
Landes, William M., and Posner, Richard A.(1994) , 'The Economics of AnticipatoryAdjudication,' 23 Journal of Legal Studies , 683-719.
Landes, William M., and Posner, Richard A.(1979) , 'Adjudication as a Private Good,' 8 Journal of Legal Studies , 235-284.
Landes, William M., and Posner, Richard A.(1980) , 'Joint and Multiple Tortfeasors: AnEconomic Analysis,' 9 Journal of Legal Studies , 517-555.
Langbein, John H.(1985) , 'The German Advantage in Civil Procedure,' 52 University ofChicago Law Review , 823-866.
Lombardero, David A.(1996) , 'Do Special Verdicts Improve the Structure of Jury DecisionMaking,' 36 Jurimetrics Journal , 275-324.
Lynk, William J.(1990) , 'The Courts and the Market: An Economic Analysis of ContingentFees in Class-Action Litigation,' 19 Journal of Legal Studies , 247-260.
Lynk, William J.(1994) , 'The Courts and the Plaintiffs' Bar: Awarding the Attorney's Feein Class-Action Litigation,' 23 Journal of Legal Studies , 185-210.
McChesney, Fred S.(1979) , 'On the Procedural Superiority of a Civil Law System,' 30 Kyklos ,507-510.
McLauchlan, William P.(1973) , 'An Empirical Study of Civil Procedure: Directed Verdictsand Judgments Notwithstanding Verdict,' 2 Journal of Legal Studies , 459-468.
McLauchlan, William P.(1977) , 'An Empirical Study of the Federal Summary JudgmentRule,' 6 Journal of Legal Studies , 427-459.
Macey, Jonathan R.(1994) , 'Judicial Preferences, Public Choice, and the Rules of Procedure,' 23 Journal of Legal Studies , 627-646.
Menell, Peter S.(1983) , 'A Note on Private versus Social Incentive to Sue in a Costly LegalSystem,' 12 Journal of Legal Studies , 41-52.
Miceli, Thomas J.(1993) , 'Optimal Deterrence of Nuisance Suits by Repeat Defendants,' 13 International Review of Law and Economics , 135-144.
Miceli, Thomas J., and Sergson, Kathleen (1991) , 'Contingent Fees for Lawyers: The Impacton Litigation and Accident Prevention,' 20 Journal of Legal Studies , 381-399.
Miceli, Thomas J.(1994) , 'Do Contingent Fees Promote Excessive Litigation?' 23 Journalof Legal Studies , 211-224.
Miller, Geoffrey P.(1986) , 'An Economic Analysis of Rule 68,' 15 Journal of Legal Studies ,93-125.
Miller, Geoffrey P.(1987) , 'Some Agency Problems is Settlement,' 16 Journal of LegalStudies , 189-215.
Nalebuff, Barry (1987) , 'Credible Pretrial Negotiation,' 18 RAND Journal of Economics ,198-210.
Oakley, John B. and Coon, Arthur F. (1986) , 'The Federal Rules in State Courts: A Surveyof State Court Systems & Civil Procedure', 61 Washington Law Review , 1367-1427.
Ordover, Janusz A.(1978) , 'Costly Litigation in the Model of Single Activity Accidents,' 7 Journal of Legal Studies , 243-261.
Ordover, Janusz A.(1981) , 'On the Consequences of Costly Litigation in the Model of SingleActivity Accidents: Some New Results,' 10 Journal of Legal Studies , 269-291.
Perloff, Jeffrey, Rubinfeld, Daniel L., and Ruud, P.(1996) , 'Antitrust Settlements and TrialOutcomes,' 78 Review of Economics and Statistics , 401 ff.
Plott, Charles R.(1987) , 'Legal Fees: A Comparison of the American and English Rules,' 3 Journal of Law, Economics, and Organization , 185-193.
P'ng, Ivan P.L.(1987) , 'Litigation, Liability, and Incentives for Care,' 34 Journal of PublicEconomics , 61-85.
P'ng, Ivan P. L.(1983) , 'Strategic Behavior in Suit, Settlement, and Trial,' 14 Bell Journalof Economics , 539-550.
Polinsky, A. Mitchell, and Rubinfeld, Daniel L. (1988a) , 'The Deterrent Effects ofSettlements and Trials', 8 International Review of Law and Economics , 109-116.
Polinsky, A. Mitchell, and Rubinfeld, Daniel L. (1988b) , 'The Welfare Implications ofCostly Litigation for the Level of Liability', 17 Journal of Legal Studies , 151-164.
Polinsky, A. Mitchell, and Rubinfeld, Daniel L.(1993) , 'Sanctioning Frivolous Suits: AnEconomic Analysis,' 82 Georgetown Law Journal , 397-435.
Posner, Richard A.(1973) , 'An Economic Approach to Legal Procedure and JudicialAdministration,' 2 Journal of Legal Studies , 399-458.
Posner, Richard A.(1992) , The Economic Analysis of Law, 4th. ed. , Boston, Little Brown.
Priest, George L.(1980) , 'The Selective Characteristics of Litigation,' 9 Journal of LegalStudies , 399-422.
Priest, George L.(1982) , 'Regulating the Content and Volume of Litigation: An EconomicAnalysis,' 1 Supreme Court Economic Review , 163-183.
Priest, George L.(1987) , 'Measuring Legal Change,' 3 Journal of Law, Economics andOrganization , 193-226.
Priest, George L.(1985) , 'Reexamining the Selection Hypothesis: Learning from Wittman'sMistakes,' 14 Journal of Legal Studies , 215-243.
Priest, George L. and Klein, Benjamin (1984) , 'The Selection of Disputes for Litigation,' 13 Journal of Legal Studies , 1-55.
Ramsayer, J. Mark, and M. Nakazato (1989) , 'The Rational Litigant: Settlement Amountsand Verdict Rates in Japan,' 18 Journal of Legal Studies , 263-290.
Reinganum, Jennifer F., and Louis L. Wilde (1986) , 'Settlement, Litigation and theAllocation of Legal Costs,' 17 RAND Journal of Economics , 555-566.
Rose-Ackerman, Susan, and Geistfeld, Mark (1987) , 'The Divergence between Social andPrivate Incentives to Sue: A Comment on Shavell, Menell, and Kaplow,' 16 Journal ofLegal Studies , 483-491.
Rosenberg, David, and Shavell, Steven (1985) , 'A Model in Which Suits are Brought forTheir Nuisance Value,' 5 International Review of Law and Economics , 3-13.
Rosenfeld, Andrew (1976) , 'An Empirical Test of Class-Action Settlement,' 5 Journal ofLegal Studies , 113-120.
Rubin, Paul H.(1977) , 'Why is the Common Law Efficient?' 6 Journal of Legal Studies ,51-63.
Rubinfeld, Daniel L., and Sappington, David E. M.(1987) , 'Efficient Awards and Standardsof Proof in Judicial Proceedings,' 18 RAND Journal of Economics , 308-315.
Rubinfeld, Daniel L., and Scotchmer, Suzanne (1993) , 'Contingent Fees for Attorneys: AnEconomic Analysis,' 24 RAND Journal of Economics , 343-356.
Schwartz, Warren F., and Tullock, Gordon (1975) , 'The Costs of a Legal System,' 4 Journalof Legal Studies , 75-82.
Schwartz, Edward P., and Schwartz, Warren F.(1996) , 'The Challenge of PeremptoryChallenges,' 12 Journal of Law, Economics, and Organization , 325-360.
Schwarzer, William W.(1989) , 'The Federal Rules, The Adversary Process, and DiscoveryReform,' 50 University of Pittsburgh Law Review , 703-723.
Schweizer, Urs (1989) , 'Litigation and Settlement under Two-Sided Incomplete Information,' 56 Review of Economic Studies , 163-178.
Shavell, Steven (1996) , 'Any Frequency of Plaintiff Victory is Possible,' 25 Journal of LegalStudies , 493-501.
Shavell, Steven (1995) , 'Alternative Dispute Resolution: An Economic Analysis,' 24 Journalof Legal Studies , 1-28.
Shavell, Steven (1982) , 'Suit, Settlement, and Trial: A Theoretical Analysis UnderAlternative Methods for the Allocation of Legal Costs,' 11 Journal of Legal Studies ,55-81.
Shavell, Steven (1993) , 'Suits versus Settlement when Parties Seek Nonmonetary Judgments,' 22 Journal of Legal Studies , 1-13.
Shavell, Steven (1982) , 'The Social versus the Private Incentive to Bring Suit in a CostlyLegal System,' 11 Journal of Legal Studies , 333-339.
Smith, Janet K. and Cox, Steven R.(1985) , 'The Pricing of Legal Services: A ContractualSolution to the Problem of Bilateral Opportunism,' 14 Journal of Legal Studies ,167-183.
Snyder, Edward A., and Hughes, James W.(1990) , 'The English Rule for Allocating LegalCosts: Evidence Confronts Theory,' 6 Journal of Law, Economics & Organization ,345-380.
Sobel, Joel (1989) , 'An Analysis of Discovery Rules,' 52 Law and Contemporary Problems ,133-159.
Solomine, Michael E. and Pacheco, Bryan (1997) , 'State Court Regulation of Offers ofJudgement and its Lessons for Federal Practice', 13 Ohio State Journal on DisputeResolution , 51-78.
Spier, Kathryn E.(1992) , 'The Dynamics of Pretrial Negotiation,' 59 Review of EconomicStudies , 93-108.
Spier, Kathryn E.(1994) , 'Pretrial Bargaining and the Design of Fee-Shifting Rules,' 25 RAND Journal of Economics , 197-214.
Spier, Kathryn E.(1994) , 'Settlement, Bargaining, and the Design of Damage Awards,' 10 Journal of Law, Economics, and Organization , 84-95.
Spurr, Stephen J.(1991) , 'An Economic Analysis of Collateral Estoppel,' 11 InternationalReview of Law and Economics , 47-61.
Subrin, Stephen N. (1989) , 'Local Rules, and State Rules: Uniformity, Divergence andEmerging Procedural Patterns', 137 University of Pennsylvania Law Review , 1999-2051.
Thomas, Robert E.(1995) , 'The Trial Selection Hypothesis without the 50 Percent Rule:Some Experimental Evidence', 24 Journal of Legal Studies , 209-228.
Thomason, Terry (1991) , 'Are Attorneys Paid What They're Worth?' Contingent Fees andthe Settlement Process,' 20 Journal of Legal Studies , 187-223.
Trubek, David M., Sarat, Austin, Felstiner, William L.F., Kritzer, Herbert M. and Grossman,Joel B. (1983) , 'The Cost of Ordinary Litigation', 31 UCLA Law Review , 72-127.
Tullock, Gordon (1980) , Trials on Trial: The Pure Theory of Legal Procedure , New York,Columbia University Press.
Tullock, Gordon (1988) , 'Defending the Napoleontic Code over the Common Law,' 2 Research in Law and Policy Studies , 3-27.
Tullock, Gordon (1975) , 'On Effective Organization of Trials,' 28 Kyklos , 745-762.
Walker, Laurens (1994) , 'Avoiding Surprise from Federal Civil Rule Making: The Role ofEconomic Analysis,' 23 Journal of Legal Studies , 569-593.
Waldfogel, Joel (1995) , 'The Selection Hypothesis and the Relationship Between Trial andPlaintiff Victory,' 103 Journal of Political Economy , 229-260.
Wang, Gyu Ho, Kim, Jeong-Yoo, and Yi, Jong-Goo (1994) , 'Litigation and PretrialNegotiation under Incomplete Information,' 10 Journal of Law, Economics andOrganization , 187-200.
Watts, Alison (1994) , 'Bargaining Through an Expert Attorney,' 10 Journal of Law,Economics and Organization , 168-186.
Williams, Philip L. and Williams, Ross A.(1994) , 'The Cost of Civil Litigation: AnEmpirical Study,' 14 International Review of Law and Economics , 73-86.
Wittman, Donald (1988) , 'Dispute Resolution, Bargaining, and the Selection of Cases forTrial: A Study in the Generation of Biased and Unbiased Data,' 17 Journal of LegalStudies , 313-352.
Wittman, Donald (1985) , 'Is the Selection of Cases for Trial Biased?' 14 Journal of LegalStudies , 185-214.
Yang, Bill Z.(1996) , 'Litigation, Experimentation, and Reputation,' 16 International Reviewof Law and Economics , 503-521.
Adams, Michael (1986) , 'Der Zivilproze als Folge strategischen Verhaltens' [On CivilProcedure as a Consequence of Strategic Behavior], 7 Zeitschrift für Rechtssoziologie ,212-225.
Adams, Michael (1983) , 'Eine wohlfahrtstheoretische Analyse des Zivilprozesses und derRechtsschutzversicherungen' [An Economic Analysis of Civil Procedure and Legal AidInsurance], 139 Zeitschrift für Schweizerisches Recht , 187-208.
Adams, Michael (1981) , Ökonomische Analyse des Zivilprozesses [Economic Analysis ofCivil Procedure] , Königstein/Ts, Athenäum, 130 ff.
Alexander, Janet Cooper (1994) , 'Judges' Self Interest and Procedural Rules: Comment,' 23 Journal of Legal Studies , 647-665.
Bone, Robert G.(1994) , 'The Empirical Turn in Procedural Rule Making: Comment', 23 Journal of Legal Studies , 595-613.
Bowles, Roger A.(1981) , 'Economic Aspects of Legal Procedure,' in Burrows, Paul andVeljanovski, Cento G. (eds.), The Economic Approach to Law , London, Butterworths,191-209.
Broder, Josef M.(1978) , 'Citizen Participation in Michigan District Courts', in RANDALL ,Allan (ed.), Citizen Participation in Natural Resource Decision Making, North CentralResearch Strategy Committee for Natural Resources, Department of AgriculturalEconomics, University of Kentucky. Reprinted in Samuels, Warren J. and Schmid, A.Allen (eds.), Law and Economics: An Institutional Perspective, Boston, Nijhoff, 1981,166-178.
Brown, John Prather (1985) , 'Alternatives to the Present System of Litigation for PersonalInjury', in Baily, Mary Ann and Cikins, Warren I. (eds.), The Effects of Litigation onHealth Care Costs , Washington, Brookings Institution, 69-79.
Carrington, Paul D.(1979) , 'Adjudication as a Private Good: A Comment', 8 Journal of LegalStudies , 303-317.
Carroll, Sidney L. and Gaston, Robert J.(1981) , 'A Note on the Quality of Legal Services:Peer Review and Disciplinary Service', 3 Research in Law and Economics , 251- 260.
Chiorazzi, Michael et al.(1988) , 'Empirical Studies in Civil Procedure: A Selected AnnotatedBibliography', 51 Law and Contemporary Problems , 87-207.
Conference (1987) : 'Conference on the Law and Economics of Procedure', 3 Journal of Law,Economics, & Organization , 143-372.
Cooper, Edward H.(1994) , 'Discovery Cost Allocation: Comment,' 23 Journal of LegalStudies , 465-480.
Cooter, Robert D., and Ulen, Tom (1989) , Law and Economics (Scott Foresman, 1988; 2ndedition, forthcoming 1996), Japanese translation by Prof. Shozo Ota, introduction byProf. Koji Shimdo, published by Shoji-Homu.
Davis, Otto A.(1979) , 'Public and Private Characteristics of a Legal Process: A Comment', 8 Journal of Legal Studies , 285-293.
Denzau, Arthur (1979) , 'Litigation Expenditures as Private Determinants of JudicialDecisions: A Comment', 8 Journal of Legal Studies , 295-302.
Getman, Julius G.(1974) , 'A Critique of the Report of the Shreveport Experiment', 3 Journalof Legal Studies , 487-497.
Goldberg, Victor P. (ed.) (1979), 'Discussion by Seminar Participants', 8 Journal of LegalStudies , 323-398.
Huang, Peter H., Wu, Ho Mou (1992) , 'Emotional Responses in Litigation,' 12 InternationalReview of Law and Economics , 31-44.
Linder, Douglas O.(1989) , 'Some Doubts Concerning the Selection Hypothesis of GeorgePriest', 37 University of Kansas Law Review , 319-347.
Miller, Arthur R.(1984) , 'The Adversary System: Dinosaur or Phoenix,' 69 Minnesota LawReview , 1-37.
Miller, Geoffrey P.(1977) , Note, Aldinger v. Howard and Pendent Jurisdiction, 77 ColumbiaLaw Review , 127-152.
Miller, Geoffrey P.(1994) , 'Economic Analysis of Civil Procedure: Introduction', 23 Journalof Legal Studies , 303-306.
Miller, Geoffrey P.(1989) , 'Comment: Some Thoughts on the Equilibrium Hypothesis,' 69 Boston University Law Review , 561-568.
Nederlands Juristen Blad(1990) : Rechtshulp anno 1990, Special Issue, (a number of articles).
Nederlands Juristen Blad(1987) : Tussen kwaliteit en efficiency in de rechtspraak [BetweenQuality and Efficiency in Case Law], Special Issue, (a number of articles).
Polinsky, A. Mitchell and Che, Yeon-Koo (1991) , 'Decoupling Liability: Optimal Incentivesfor Care and Litigation,' 22 RAND Journal of Economics , 562-570.
Posner, Richard A.(1988) , 'Comment: Responding to Gordon Tullock', 2 Research in Lawand Policy Studies , 29-33.
Rowe, Thomas D., Jr.(1994) , 'Repealing the Law of Unintended Consequences? Comment', 23 Journal of Legal Studies , 615-626.
Sarokin, H. Lee (1989) , 'A Comment on Geoffrey Hazard's Authority in the Dock', 69 Boston University Law Review , 477-479.
Schwarzer, William W.(1988) , 'Rule 11 Revisited,' 101 Harvard Law Review , 1013- 1025.
Shavell, Steven (1989) , 'The Sharing of Information Prior to Settlement of Litigation,' 20 RAND Journal of Economics , 183-195.
Symposium(1987) : 'Conference on the Law and Economics of Procedure', 3 Journal of Law,Economics, and Organization , 143-447.
Symposium(1989) : 'Issues in Civil Procedure: Advancing the Dialogue', 69 Boston UniversityLaw Review , 467-779.
White, Lawrence J.(1988) , 'Litigation and Economic Incentives,' 11 Research in Law andEconomics , 73-90.
Yeazell, Stephen C.(1989) , 'The Salience of Salience: A Comment on Professor Hazard'sAuthority in the Dock', 69 Boston University Law Review , 481-486.
© Copyright 1998 Bruce H. Kobayashi and Jeffrey S. Parker