The Second Regressive Effect of Legal Uncertainty: the Regressive Effect on Appealable Decisions

Abstract

This paper makes the point that a court decision which is open for appeal is actually equivalent to take it or leave it settlement proposal to both parties. In order that the case will not be appealed they both need to take this proposal. Hence, a right to appeal actually activates the regressive effects applicable on settlements also on the lower court decisions. Legal Uncertainty has a regressive effect on lower court decisions. If the judge wishes to block appeals in order to protect one party's interest or his self-interest or the system's interest, his decision will be regressive biased relatively to the higher court decision. This actually may be happened also without strategic judges, but in evolutionary process: the surviving power of regressive decision is bigger in uncertain legal regime.

Keywords: regressive effect, appeal, legal uncertainty, litigation, law and economis

JEL Classification: K