Priest and Klein's Selection of Disputes for Litigation has been one of the most influential legal articles of all time. This Essay reviews its contribution to legal scholarship. Priest and Klein's central and enduring contribution is the recognition that some cases are more likely to settle than others. It follows that litigated disputes are not a random sample of all disputes. This basic insight is true under nearly all litigation models and is also confirmed by a large body of empirical evidence. Priest and Klein's article is also famous for its prediction that, under certain conditions, the plaintiff trial win rate will approach fifty percent. That prediction, however, is not supported by most other litigation models and has received only modest support from the empirical literature. Our citation analysis also suggests that The Selection of Disputes for Litigation is one of the rare articles whose importance was both recognized almost immediately and whose influence has continued to grow over several decades.

This article advances the debate over legal origins by using survey data and satellite imagery to measure economic development and by employing a geographic regression discontinuity (GRD) design to take into account climate, culture, and other observable and unobservable factors correlated with location. The basic legal structure of most countries was imposed by colonial powers, but Great Britain, France and other European nations did not colonize randomly. The lack of random assignment means that simple cross-country analyses may lead to erroneous conclusions because of unobservables correlated with legal origin. GRD is especially promising for Africa because many borders were drawn in Europe by diplomats and bureaucrats who had only the haziest knowledge of local conditions, except in coastal areas. As a result, borders split ethnic groups, and areas on either side of the border are similar along observable dimensions and presumably on unobservable ones as well. Satellite imagery is used to measure nighttime lights. Survey data are used to measure individual height and whether a household has electricity, a cell phone, a non-dirt floor, non-human-powered transport, or access to improved latrines or toilets. The regression coefficients are of mixed signs. The point estimates thus suggest that countries with common law legal origin do not perform consistently better, as measured by these eight proxies for economic development, than those with civil law. Most coefficients are not statistically significant at conventional levels, although the most robust of those that are -- non-human-powered transport and light per capita -- show a civil law advantage. Nevertheless, because the confidence intervals are wide, we cannot exclude a positive common law effect for most outcomes.

In a pre-registered 2 x 2 x 2 factorial between-subject randomized lab experiment with 61 federal judges, we test if the law influences judicial decisions, if it does so more under a rule than under a standard, and how its influence compares to that of legally irrelevant sympathies. Participating judges received realistic materials and a relatively long period of time (50 min) to decide an auto accident case. We find at best weak evidence that the law matters or that rules constrain more than standards, and no evidence of a sympathy effect. (JEL K00, K13, K40, K41)

Scholars have argued that modern American choice of law is subject to three biases: (1) a bias in favor of residents of the forum state (pro-resident bias), (2) a bias in favor of plaintiffs (pro-plaintiff bias), and (3) a bias in favor of the law of the forum (forum- law bias). This article brings new evidence about these biases from a comprehensive database of vehicular accident cases and from the first experiment related to choice of law. Overall, there is some evidence of a pro-resident bias in state (but not federal) court, some evidence of pro-plaintiff bias in both federal and state court, and no evidence of a forum-law bias.

This article presents the first rigorous, multi-country analysis of settlement rates. Data on settlement were collected for twenty-three of the twenty-five largest economies. Settlement rates vary greatly, from below 15% in France, Belgium, and Russia, to over two-thirds in Australia. Settlement rates also vary by subject matter, with settlement rates generally highest in tort, especially in the U.S. There are also dramatic differences in settlement rates by legal origin, with common law countries generally having the highest settlement rates. Because settlement rates in civil law countries are so low, selection effects may not be a significant problem for empirical work involving them. Higher settlement rates are correlated with early disclosure and shorter court delays, but more research is needed to explain the large differences in settlement rates.

Priest and Klein's 1984 article, "The Selection of Disputes for Litigation," famously hypothesized a "tendency toward 50 percent plaintiff victories" among litigated cases. Despite the article's enduring influence, its results have never been formally proved, and doubts remain about their meaning, validity, and generality. This article makes two main contributions. First, it distinguishes six hypotheses plausibly attributable to Priest and Klein. Second, it mathematically proves or disproves the hypotheses under a generalized version of Priest and Klein's model. The Fifty-Percent Limit Hypothesis and three other hypotheses attributable to Priest and Klein (1984) are mathematically well-founded and true under the assumptions made by Priest and Klein. In fact, they are true under a wider array of assumptions. More specifically, the Trial Selection Hypothesis, Fifty-Percent Limit Hypothesis, Asymmetric Stakes Hypothesis, and Irrelevance of Dispute Distribution Hypothesis are true for any distribution of disputes that is bounded, strictly positive, and continuous. The Fifty-Percent Bias Hypothesis is true when the parties are very accurate in estimating case outcomes, but only sometimes true when they are less accurate. As shown in Klerman and Lee (2014), the No Inferences Hypothesis is false.

Brady, Evans, and Wehrly (2019) have conducted an important and persuasive replication. Future work should explore possible reputational penalties for firms that cater to socially conscious consumers but are caught harming the environment. Conversely, it is possible that, for some firms, environmental violations cause reputational benefits. (c) 2020 Published by Elsevier Inc.

Judges decide cases. Do they also try to influence which cases they decide? Clearly plaintiffs “shop” for the most attractive forum, but do judges try to attract cases by “selling” their courts? Some American judges actively try to enlarge their influence by making their courts attractive to plaintiffs, a phenomenon known as “forum selling.” This article shows that forum selling occurs outside the U.S. as well, focusing on Germany, a country that is often held up as the paragon of the civil law approach to adjudication. As in the U.S., German courts attract cases primarily through the pro-plaintiff manipulation of procedure, including the routine issuance of ex parte injunctions in press cases and refusal to stay patent infringement proceedings when the patent’s validity is challenged in another forum. A critical difference between forum selling in Germany and the U.S. is that court administrators are more actively involved in Germany. As state officials, German court administrators have the incentive to consider the effect of caseloads on government revenue and the local economy, and they use their power to allocate judges to particular kinds of cases in order to make their courts attractive. They also use their power over promotion, case allocation, and resources to reward judges who succeed in attracting cases. Based on an extensive set of interviews with attorneys, judges and court officials, this article describes evidence of forum selling in German patent, press, and antitrust law. It also analyzes how German courts compete internationally with courts from other countries.

Of the two great legal systems produced by Western civilization, the English common law is by far the younger. Nearly a thousand years passed between the classical period of Roman law and the birth of English law as a national institution. Many scholars have viewed the reign of Henry I (d. 1189), the medieval English king most associated with legal reform, as pivotal in the development of the common law. 1 The English common law came into its own in the twelfth century, long after the

The hallmark of Judge Posner’s class action decisions is rigorous review to ensure that aggregate litigation serves the best interests of class members and does not unduly pressure defendants to settle. Although he championed class actions, especially as a way to provide efficient justice in cases involving numerous small claims, Posner also recognized that, because of the agency problems that pervade class action litigation, ordinary adversary procedures were not sufficient to protect class members. As a result, the judge had to act as a fiduciary for the class, especially when approving settlements and fee awards. In addition, the colossal liabilities potentially imposed by a class action meant that a defendant might settle, even if the case had little merit, so judicial scrutiny, in particular interlocutory appellate review of certification decisions, was necessary to protect defendants. The influence of Posner’s opinions can be seen in the FRCP, especially the drafting of Rule 26(f), which, following Posner’s opinion in Rhone-Poulenc, allowed interlocutory review of certification decisions. Citation analysis also confirms Posner’s influence on the analysis of class actions, especially outside the Seventh Circuit and in academia.

Abstract Quantitative legal history is in a rather sorry state. Only about a quarter of recent works of legal history use even simple quantitative methods (such as tables or graphs), and articles or books with more sophisticated methods, such as regression analysis, are extremely rare. The infrequent use of quantitative techniques is also a missed opportunity. Scholars from other fields, including economics, sociology, and political science, are using statistics to analyse legal history. Such analysis is particularly helpful in understanding the effect of legal change and in analysing the influence of multiple factors on legislation, judicial decision-making, and citizen behaviour. This chapter first assesses quantitatively the use of quantitative methods in legal history. It then discusses a few examples of the successful use of numbers and statistics in recent books addressing legal historical topics. Finally, it looks to the future of quantitative legal history.

For many years, most scholars have assumed that the strength of reputational incentives is positively correlated with firm size. Firms that sell more products or services were thought more likely to be trustworthy than those that sell less because larger firms have more to lose if consumers decide they have behaved badly. That assumption has been called into question by recent work that shows that, under the standard infinitely repeated game model of reputation, reputational economies of scale will occur only under special conditions, such as monopoly, because larger firms not only have more to lose from behaving badly, but also more to gain. This article shows that reputational economies of scale exist even when there is competition and without other special conditions, if the probability that low quality is detected is positively correlated with the quantity of the good or service sold. It also shows that reputational economies of scale exist, under some circumstances, in a finite-horizon model of reputation. Reputational economies of scale help explain why law and accounting firms can act as gatekeepers, why mass market products are more likely to be safe, why firms are less likely to exploit one-sided contracts than consumers, and why manufacturers market new products under the umbrella of established trademarks.

This article explores the selection of disputes for litigation in a setting with two-sided incomplete information and correlated signals. The models analyzed here suggest that Priest and Klein’s conclusion that close cases are more likely to go to trial than extreme cases remains largely valid when their model is interpreted as involving correlated, two-sided incomplete information and is updated (i) to incorporate take-it-or-leave-it offers or the Chatterjee-Samuelson mechanism, (ii) to take into account the credibility of the plaintiff’s threat to go to trial, and (iii) to allow parties to make sophisticated, Bayesian inferences based on knowledge of the distribution of disputes. On the other hand, Priest and Klein’s prediction that the plaintiff will win fifty percent of litigated cases is sensitive to bargaining and parameter assumptions.

IntroductionSince 1957, most contingent fee lawyers in New York City have been required to file a "closing statement" with the clerk of the appellate division when a case is resolved, whether the case is resolved by settlement, judgment, or abandonment by the client. The closing statement includes the amount of any settlement or judgment, the amount paid to the lawyer, and an itemization of the lawyer's expenses. Because they provide information on issues not generally available elsewhere, closing statements provide a unique window into contingent fee litigation. This Article aims to provide a preliminary analysis of the data in the closing statements.in the next part we provide information on the origin and content of the data. In Part II we provide evidence on rates at which claims are abandoned, settled, or adjudicated. We find that the settlement rate in the New York data is significantly higher than previous estimates. In Part III we provide information on plaintiff recovery rates. We find that once we account for the riskiness of going to trial, there is relatively little difference between settlement amounts and amounts received in adjudication. In Part IV we provide evidence on the size and composition of expenses and fees. In Part V we present evidence on the demographic distribution of tort claims. Specifically we find that the number of claims is negatively correlated with income. The final Part concludes.I.Retainer and Closing StatementsIn the 1920s, the bar and bench in New York City became increasingly concerned about the conduct of contingent fee lawyers. In 1928, the bar associations for New York City, Manhattan, and the Bronx petitioned the Appellate Division of the First Judicial Department of the New York Supreme Court, which had supervisory powers over state courts in Manhattan and the Bronx, to conduct an investigation. The Appellate Division ordered Justice Wasservogel to produce a report.Judge Wasservogel held hearings, and, in 1928, issued a report that concluded:The evidence adduced before me bears out the truth of the allegations contained in the petition of the three bar associations, to the effect that there exists in this Judicial Department a practice commonly known as "ambulance chasing."Personal injury cases have,in the main, come into the hands of relatively few lawyers, some of whom have conducted their practice purely as a business, to the detriment of the public and the profession.1To "prevent a recurrence of the improper practices by which attorneys secure retainers from injured persons," the report recommended that attorneys be required to file "a copy of the retainer by which the attorney for the plaintiff was engaged, and also an affidavit by such attorney stating that the case was not solicited directly or indirectly, and setting forth how the retainer was obtained."2 The report also recommended that all settlements be approved by the court.3In 1929, the First Department implemented some of the recommendations of the report. In particular, they required plaintiffs' lawyers to file "retainer statements" with the court within ten days of signing the contingent fee agreements. The retainer statement sets out "the terms of compensation."4 Regulations also required lawyers to mail their clients a written statement accounting for any judgment or settlement within ten days of receiving the money.5 If the lawyer was unable to find the client, the lawyer was required to send the accounting to the court, but otherwise the accounting was sent only to the client.6In 1955, Judge Wasservogel, then retired from his judgeship and back in private practice, was again asked to produce a report on contingent fee lawyers, this time with a charge to consider capping contingent fees. This report was commissioned not only by the First Department (Manhattan and the Bronx), but also by the Second Department, which covers the rest of New York City as well as Long Island and five counties immediately north of New York City (Duchess, Orange, Putnam, Rockland, and Westchester). …

Schweizer (2017) provides a powerful and general way of using compensation payments to induce efficient actions. Its application to takings under fiscal illusion, however, is problematic. A better model would assume that the government decides to take property by considering effects on the median voter. Under that assumption, payments based on the market value of land, assuming non-excessive investment, induce efficient action by both landowners and the government.

Jurisdiction and choice of law in property disputes has been remarkably stable. The situs rule, which requires adjudication where the property is located and application of that state’s law, remains the norm in most of the world. This article is the first to apply modern economic analysis to choice of law and jurisdiction in property disputes. It largely confirms the wisdom of the situs rule, but suggests some situations where other rules may be superior. For example, in disputes about stolen art, the state where the work was last undisputedly owned may be both the most efficient forum and the best source of applicable law.

If it were not so common, the reasoning in Walden v. Fiore would seem bizarre: the jurisdiction of a federal court over a federal claim against a federal agent depends on how much power the Constitution allows the State of Nevada. This strange result is, of course, a consequence of FRCP 4(k)(1)(A), which, in most cases, makes the jurisdiction of a federal district court co-extensive with the jurisdiction of a state court of general jurisdiction in the same district. Less obviously, the outcome in Walden v. Fiore reflects Stafford v. Briggs, which, contrary to the plain language of the federal venue statute, held that a Bivens action could not be brought in the judicial district in which the plaintiff resides. Walden v. Fiore thus provides an opportunity to revisit the wisdom of FRCP 4(k)(1)(A) and Stafford v. Briggs. FRCP 4(k)(1)(A) should be revised in cases involving federal law to allow jurisdiction in any federal district court. Venue, however, should be restricted to ensure that the most convenient forum is chosen, taking into account convenience to both plaintiffs and defendants. In cases involving alleged misconduct by federal officers, where the U.S. can easily defend in any district, a plaintiff should be allowed to sue in his or her home district.

Forum shopping is problematic because it may lead to forum selling. For diverse motives, including prestige, local benefits, or re-election, some judges want to hear more cases. When plaintiffs have wide choice of forum, such judges have incentives to make the law more pro-plaintiff, because plaintiffs choose the court. While only a few judges may be motivated to attract more cases, their actions can have large effects, because their courts will attract a disproportionate share of cases. For example, judges in the Eastern District of Texas have distorted the rules and practices relating to case assignment, joinder, discovery, transfer, and summary judgment in order to attract patent plaintiffs to their district. As a result of their efforts, more than a quarter of all patent infringement suits were filed in the Eastern District of Texas in 2014. Consideration of forum selling helps explain constitutional constraints on personal jurisdiction. Without constitutional limits on jurisdiction, some courts are likely to be biased in favor of plaintiffs in order to attract litigation. This article explores forum selling through five case studies: patent litigation and the Eastern District of Texas and elsewhere, class actions and mass torts in “magnet jurisdictions” such as Madison County, Illinois, bankruptcy and the District of Delaware, ICANN domain name arbitration, and common law judging in early modern England.