The Regressive Effect of Appealability

Abstract

This paper makes the point that a court decision that is open for appeal is actually equivalent to a take-it-or-leave-it settlement proposal to both parties. In order that the case will not be appealed they both need to "take", i.e., accept, this proposal. Thus, a right to appeal actually activates the regressive effects that characterize settlements, also with respect to 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, her own self-interest, or the system's interest, her decision will be regressively biased relative to the higher-court decision. In fact this could happen also without strategic judges, but as an evolutionary process: the survival power of regressive decisions is stronger in a legally uncertain regime.