Rethinking Appeals

Abstract

This paper makes the point that a court decision that is open to an appeal is akin to a take-it-or-leave-it settlement proposal for both parties. For the case to not be appealed, both parties need to “take,” i.e., accept, this proposal. Thus, on one hand, if both parties cannot achieve a settlement by themselves, they usually benefit from the right to appeal. On the other hand, a right to appeal activates the regressive effects that characterize settlements, which also applies to lower-court decisions. For example, legal uncertainty has a regressive effect on lower-court decisions: if the judge wishes to block appeals to protect one party's interest, his or her own self-interest, or the system's interest, the lower court judge’s decision will be regressively biased relative to the higher-court decision. In fact, this could also occur without strategic judges, but this would be an evolutionary process.

Keywords: Game Theory, Law and Economics, Litigation, Appeals, Distributive Justice, Legal Negotiation

JEL Classification: k