The Case for Restricting Access to Courts

40 Pages Posted: 28 Dec 2004 Last revised: 17 Jan 2011

See all articles by Michael C. Jensen

Michael C. Jensen

Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit

William H. Meckling

Simon School, University of Rochester (Deceased)

Clifford G. Holderness

Boston College - Department of Finance

Date Written: May 1, 1981

Abstract

This article examines unrecognized implications of various doctrines governing access to court. The analysis indicates that doctrines such as standing, res judicata and collateral estoppel have far reaching implications for the nature of adjudication and the basic structure of rights in society. A liberal standing doctrine causes Peremptory Adjudication, creates inalienable rights and erodes the common law doctrine against suing competitors. Inalienability of rights causes the Coase Theorem to fail and creates externalities. Furthermore, allowing suit over non-contractual pure value effects creates closed market monopolies. All these factors reduce efficiency and thereby reduce human welfare. In this sense the analysis (1) indicates the widespread enthusiasm for democratization of the courts is mistaken, and (2) provides the case for restricting access to the courts.

Keywords: standing, stare decisis, res judicata, collateral estoppel, Coase Theorem, courts, legal system, efficiency, adjudication, rights, externalities

JEL Classification: K1, K2, K3, K4

Suggested Citation

Jensen, Michael C. and Meckling, William H. and Holderness, Clifford G., The Case for Restricting Access to Courts (May 1, 1981). MERC Working Paper No. 81-06; Harvard Business School NOM Unit Working Paper No. 1981. Available at SSRN: https://ssrn.com/abstract=618765 or http://dx.doi.org/10.2139/ssrn.618765

Michael C. Jensen (Contact Author)

Harvard Business School ( email )

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Negotiations, Organizations & Markets
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United States

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Harvard University - Accounting & Control Unit ( email )

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Boston, MA 02163
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William H. Meckling

Simon School, University of Rochester (Deceased)

Clifford G. Holderness

Boston College - Department of Finance ( email )

Carroll School of Management
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