Tipping the Scales – Settlement, Appeal and the Relevance of Judicial Ambition

Judges become ambitious decision makers when they face appellate review. This paper applies a contract theoretic perspective to the behavior of self-interested trial judges in a two-level court system and analyzes how different judicial stereotypes affect contracting in “the shadow of” the court. Co...

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Bibliographic Details
Published in:Review of law & economics 2015-07, Vol.11 (2), p.171-207
Main Author: Christmann, Robin
Format: Article
Language:English
Subjects:
Appeals
appellate review
C72
contract theory
court error
Judges & magistrates
judicial agency
K12
K41
Litigation
Settlements & damages
State court decisions
Stereotypes
Trials
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Summary:Judges become ambitious decision makers when they face appellate review. This paper applies a contract theoretic perspective to the behavior of self-interested trial judges in a two-level court system and analyzes how different judicial stereotypes affect contracting in “the shadow of” the court. Confronted with the factual ambiguity of a case, maximizing judges pursue an (privately) optimal strategy and tip the scales of the trial outcome. The model reveals that careerist judges will deliberately allow for a certain probability of judicial error in their decisions to pursue “self-advertisement” at the appeal court. Furthermore, the strongest fact-finding judge is tempted by in-trial settlements to evade the risk of appellate review, and does not foster contract verifiability to the desirable extent. Our implications put into perspective the function of appellate courts to promote court accuracy. Additionally, a judicial tendency to conclude lawsuits through in-court settlements may strain contract output.
ISSN:2194-6000
1555-5879
DOI:10.1515/rle-2015-0021