The Burden of Proof in Civil Litigation: A Simple Model of Mechanism Design
Chris William Sanchirico
University of Pennsylvania Law School; University of Pennsylvania Wharton School - Business Economics and Public Policy Department; Urban-Brookings Tax Policy Center
Appeared in The International Review of Law and Economics, Vol. 17, No. 3 (1997).
The following is an author's description of the abstract, not the actual abstract.
In civil procedure, plaintiffs are said to bear the "burden of proof." Informally, this means that unless they prove their cases with a "preponderance of the evidence," the defendant will prevail. The law and economics literature on the burden of proof has attempted to give this concept formal meaning within the theory of decision making, but it has had difficulty providing a compelling explanation for why uncertainty in the court's final assessment should act to the detriment of one party rather than the other. We show how mechanism design is useful in providing one explanation for the asymmetry. The burden of proof emerges from the optimal design of a system of fact-finding tribunals in the presence of: i) limited resources for resolving private disputes, and ii) asymmetric information about the strength of cases prior to the court's expending the resources necessary for a hearing. The paper shows that if the objective in designing a trial court system is accuracy, the "value" of hearing a case will depend partially on the certainty with which the court makes its final award. An optimal court system will filter-out "less valuable" cases by precommitting to a policy in which plaintiffs recover nothing unless they prove their cases with a threshold degree of certainty.
JEL Classification: D81, D82Accepted Paper Series
Date posted: May 24, 1998
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