61 Pages Posted: 9 Mar 2012 Last revised: 6 Nov 2012
Date Written: November 9, 2012
In this Article, we demonstrate, contrary to conventional wisdom, that all rights are relationally contingent. Our main thesis is that rights afford their holders meaningful protection only against challengers who face higher litigation costs than the rightholder. Contrariwise, challengers who can litigate more cheaply than a rightholder can force the rightholder to forfeit the right and thereby render the right ineffective. Consequently, in the real world, rights avail only against certain challengers but not others. This result is robust and pervasive. Furthermore, it obtains irrespectively of how rights and other legal entitlements are defined by the legislator or construed by courts. We also show that in many legal areas, such as property law, intellectual property law, insurance law, and criminal law, rightsholders systematically suffer from cost disadvantage vis-à-vis certain categories of challengers who can render their rights virtually unrealizable. After uncovering these problems and analyzing their implications for prevalent understandings of rights in the jurisprudential and economic literatures, we identify mechanisms that our legal system ought to adopt to fend off the threat to the integrity of its rights-based design and bolster the protection afforded by rights. These mechanisms include heightened court fees, fee shifting, punitive damages, and various procedural safeguards. We submit that under the appropriate design, they can go a long way toward countering the strategic abuse of rights.
Keywords: Litigation, litigation cost, rightholders, property rights, intellectual property law, insurance law, settlement, empty rights
JEL Classification: D23, K10, K40, O34, P14
Suggested Citation: Suggested Citation
Parchomovsky, Gideon and Stein, Alex, The Relational Contingency of Rights (November 9, 2012). Virginia Law Review, Vol. 98, Pg. 1313, 2012; U of Penn, Inst for Law & Econ Research Paper No. 12-11; Cardozo Law School Legal Studies Research Paper No. 355. Available at SSRN: https://ssrn.com/abstract=2018309