Evolution of the Common Law and the Emergence of Compromise

Abstract

In a system of judge-made law, each judge who decides a case in a particular area of law may, in principle, choose to depart from precedent in favor of another rule. This paper examines the question of whether such a system will produce constant oscillation among different legal rules, or whether it will instead produce a single rule that potential litigants can rely upon when choosing their behavior. Using a model of the legal process that treats judges as self-interested agents maximizing their private and reputation-based utility, this article derives conditions under which the common-law process will produce convergence on a single rule rather than oscillation between rules. The article also examines the circumstances in which the introduction of a compromise rule can resolve a problem of oscillation between rules.