Rent-Seeking Through Litigation: Adversarial and Inquisitorial Systems Compared

Abstract

This paper compares the adversarial system of adjudication, dominant in the common law tradition, with the inquisitorial system, dominant in the civil law tradition, using a rent-seeking, Nash equilibrium, model of litigation expenditure in which the litigants simultaneously choose their levels of effort with the goal of maximizing their returns from the case. The choice between the two systems is modeled as a continuous variable showing the equilibrium solutions of the game and their implications for procedural economy. The results are then utilized to characterize the optimal levels of adversarial and inquisitorial discovery with respect to the social benefits of truth finding and correct adjudication, and the private and administrative costs of litigation.

JEL Classification: K4