Toward Procedural Optionality: Private Ordering of Public Adjudication

Abstract:     
Private resolution and public adjudication of disputes are commonly seen as discrete, antipodal processes. There is a generally held understanding of the dispute resolution processes. The essence of private dispute resolution is that the parties can arrange the disputed rights and entitlements per agreement and without judicial intervention. In public adjudication, however, the sovereign mandates the substantive and procedural laws to be applied, many of which cannot be changed by either a party's unilateral decision or both parties' mutual consent. Neither approach allows a party an option to unilaterally alter important aspects of the process, such as the standards of proof and the attorney fee rules. This understanding is commonly accepted and rarely challenged, but it is curious nonetheless.

This Article proposes that we move towards procedural optionality, the idea that there can be nuanced mechanisms to allow unilateral, private choice in public adjudication. To show the potential efficacy of this concept, this Article proposes a scheme in which parties can unilaterally shift fees as long as they contractually bond their good faith by assuming a higher standard of proof. These rules are not ordinarily subject to an option of the parties. Uniform application of the law satisfies the concern of fairness and predictability, but this also comes at a real cost. Private choice to alter these rules can better address the problems of frivolous suits and nonprosecution of meritorious but low value claims - two problematic bookends in the spectrum of litigation. By properly structuring party options, the law can create greater convergence of private incentives and social interest. More efficient disputes resolution results, as measured by increased enforcement of and compliance with the substantive laws at lower cost. Lastly, this Article concludes by examining some policy implications of procedural optionality for substantive and procedural laws.

Number of Pages in PDF File: 59

Keywords: procedural option, settlement, litigation, attorney fee, burden of proof, frivolous suits, optional law, coase theorem

JEL Classification: K00, K4, K40, K41, K42, K49, C7, C70, C78, C79, D6, D61, D63, D8, D81, D82, D83, D84, D89

Accepted Paper Series