The Economics of Civil Procedure

Abstract

The economic analysis of procedure reduces most issues to direct costs and error costs. Direct costs are ordinary litigation costs. Error costs are the reduction in deterrence and the increase in chilling that result from inaccurate adjudication. The goal of procedure is the minimization of the sum of direct and error costs. This framework has been applied to many procedural issues, and this survey focuses on three: dispositive motions (motions to dismiss and summary judgment), discovery, and jurisdiction. Economic analysis has yielded significant insights in these areas, but important questions remain for future researchers. Because theory is often indeterminate, this survey discusses empirical as well as theoretical work, although, unfortunately, empirical work has focused on direct costs and has largely neglected error costs.