Expected Value Arbitration
79 Pages Posted: 20 Nov 2007 Last revised: 15 Oct 2008
This Article proposes a new form of dispute resolution, Expected Value Arbitration or "EVA." It would award a plaintiff the expected value of the outcome at trial or, in other words, the plaintiff would receive the amount she would recover on average if numerous courts were to decide her claim.
EVA's novel use of expected value gives it several virtues that distinguish it from trial, traditional binding arbitration, and other academic proposals for imposed compromise: first, EVA allows parties to insist on their legal rights without braving the risks of winner-take-all adjudication; second, it minimizes errors in adjudication; and, third, it encourages desirable expenditures in litigation.
Moreover, unlike past proposals for imposed compromise, EVA involves arbitration, not trial. This makes EVA a practical idea. It also means that the right of the individual to resolve her civil legal disputes as she chooses supports making EVA available to litigants, whether one assesses EVA from an economic, rights-based, or public-life conception of adjudication.
Keywords: dispute resolution, expected value arbitration
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