Should the Prosecutor Pay for Failure of Conviction?

Abstract

Loser-pays-all rules are frequently used by modern legal systems to compensate the party who prevails in a civil case for the legal fees and costs incurred during a civil trial. Loser-pays-all rules are not used in criminal cases. Public prosecution bears the cost of its prosecutorial efforts and defendants bear the cost of their defense. A criminal defendant that is brought to trial and found not guilty is usually not compensated for the defense costs incurred. Likewise, prosecutorial expenses are not compensated by guilty defendants.

In this paper we develop an economic model to consider the application of a loser-pays-all rule in criminal law. We consider the effects of this hypothetical rule on the case selection by prosecutors, and on the possible signaling effect of prosecutor's choice. We further consider the effect on defendant's decision to plead guilty, and the impact of this rule on wealth constraints that generally affect defendant's ability to secure valid legal defense.

Keywords: loser-pays-all rule, criminal law, cost shifting rules

JEL Classification: K4