Procedure in American and European Law: A General Economic Analysis

ECONOMIC ANALYSIS OF LAW: A EUROPEAN PERSPECTIVE, Aristedes N. Hatzis, ed., Edward Elgar, Forthcoming

George Mason Law & Economics Research Paper No. 07-40

26 Pages Posted: 9 Nov 2007

See all articles by Peter G. Lewisch

Peter G. Lewisch

University of Vienna - Faculty of Law

Jeffrey S. Parker

George Mason University - Antonin Scalia Law School, Faculty

Abstract

This paper seeks to develop a general view on the economic analysis of procedural law (including civil, criminal, administrative, and arbitral procedure, and the law of evidence), with particular emphasis on comparing institutional differences between American and continental European legal systems.

The principal theoretical idea developed is that procedural law can function as either a complement to or a substitute for rules of substantive law, or both simultaneously. Therefore, the economic analysis of procedural law can not be separated entirely from the underlying substantive policy. Further consequences are that procedural rules can not be studied solely in terms of the conventional "expected value" model of litigation, or solely in terms of the conventional legal desiderata of "just, speedy, and inexpensive" adjudication. Litigation can be either too expensive or too inexpensive, in the latter case by inducing inefficient substitution away from optimal ex ante contracts or optimal ex ante substantive rules of law. In the economic analysis, it is the combination of both substantive and procedural rules that determine the ultimate efficiency properties of a legal system. Furthermore, agency cost and public choice problems are important to assessing those properties.

These ideas are applied to describe and critique the existing law-and-economics literature on two major topics: (1) the provision of law enforcement, including private versus public enforcement and civil versus criminal enforcement; and (2) the structure of procedural rules as influencing the costs, expedition, accuracy, and procedural fairness of adjudications. Under both topics, features of European and American procedural systems are compared.

Keywords: procedure, adversarial, inquisitorial, enforcement, adjudication

JEL Classification: K40, K41

Suggested Citation

Lewisch, Peter G. and Parker, Jeffrey S., Procedure in American and European Law: A General Economic Analysis. ECONOMIC ANALYSIS OF LAW: A EUROPEAN PERSPECTIVE, Aristedes N. Hatzis, ed., Edward Elgar, Forthcoming, George Mason Law & Economics Research Paper No. 07-40, Available at SSRN: https://ssrn.com/abstract=1028005

Peter G. Lewisch (Contact Author)

University of Vienna - Faculty of Law ( email )

Schottenbastei 10-16
Vienna, A-1010
Austria

Jeffrey S. Parker

George Mason University - Antonin Scalia Law School, Faculty

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