Settlement Quality in Adversarial and Inquisitorial Systems

Abstract

Parties in a court case naturally bias the information they provide to the court towards their own interests. We investigate the consequences for settlement quality of a key difference between inquisitorial systems (IS) and adversarial systems (AS), specifically that the judge has more power to limit the parties' biases in IS. Under symmetry, AS achieves higher settlement quality. Beyond relatively moderate asymmetry, IS achieves higher settlement quality because the judge's ability to limit bias in the information provided by the party with a cost or resource advantage reduces the net bias in the settlement.

Keywords: civil procedure, adversarial, inquisitorial, bias, precision, settlement quality, settlement informativeness, legal insurance, firepower