In many court systems and also in different layers
around the world, parties entangled in dispute face quite large delay. The aim
of this doctoral research project is to yield a more sophisticated insight into
the economic consequences of court delay by formulating a general theory of the
demand for trials .
The interdependencies of measures against delay and
their effect on the behaviour of litigants, more particularly on the demand for
trials, was so far not well understood. From an economic point of view, the
measures against court delay may not necessarily lead to desirable outcomes. The
rationale of these initiatives might be questioned. To be able to evaluate the
effects of court delay this phenomenon must be studied in a pragmatic context.
Therefore, the study determines the impact of delay on the demand for public
(civil) dispute resolution in a first step to be able to draw conclusions with
respect to the effects of national welfare in a second step.
In a legal dispute, the behaviour of parties is
basically motivated by the net expected benefits or costs of a trial. Despite
some interesting outcomes with respect to not-time-related aspects, like
optimism and legal expense insurance, the results of the time-related effects on
behaviour have to be put into perspective from an economic point of view. There
is no urgent need to fight delay from a behavioural-economic approach , since in
theory it holds that advantages and disadvantages due to court delay will be
balanced in an economy. This conclusion only holds under the strict theoretical
and necessary assumption of an even distribution over all possible combinations
between plaintiff- and defendant-clusters. More reality-oriented research would
have to find out if this conclusion holds for particular court systems or
layers.
Contrary to the behavioural approach, however, the
social welfare effects are clearly negative. Delay is a source for legal
uncertainty and for a loss of faith in justice. Besides undermining altruistic
goals of a public legal system, court delay leads to a direct welfare loss due
to avoidable transaction costs and public expenses. The direct link between
court delay and welfare loss are due to judge-made errors (may it be due to time
pressure or a bad quality of evidence due to time), and the potential of
strategic behaviour.
The overall conclusion of the analysis is that the
net effects of court delay are negative. As a consequence, waiting lists for
trials are not an efficient, second-best rationing device of the demand for
trials and clearly need to be remedied. The research showed that a long-term
solution should be based on a demand-focused approach.