Economic Analysis of settlements

Civil Procedure Law

Seminar Paper , 2007 , 33 Pages , Grade: 1,0

Law - Miscellaneous

This paper discusses settlements in German civil proceedings. It begins by introducing some empiric data regarding the general behaviour in Germany in which to solve legal disputes. Then, it provides an overview of legal possibilities and requirements for settlement and/or not to go to trial, and briefly compares the German approach with those of other countries. The essay’s purpose, however, is to look at the economic efficiency of settlements. Using an economic analysis of law and the principal tool now being employed in this area – the game theory –, this paper gives economic reasons and conditions for individuals to determine whether and how to settle disputes. Additionally, in order to explain the observed behaviour, the paper takes a detailed look at Germany and the average German attitude on how to solve legal disputes. For this reason, it discusses abstract reasons for the observed behaviour and other than the theoretical ones.

Inhaltsverzeichnis (Table of Contents)

• I. INTRODUCTION
• II. LEGAL BACKGROUND
  • 1. Sec. 779 of the German Civil Code (§ 779 BGB)
  • 2. Sec. 278 of the Code of Civil Procedure (§ 278 ZPO)
  • 3. Sec. 15a of the Introductory Law to the Code of Civil Procedure (§ 15a EGZPO)
  • 4. Others
  • 5. Other countries
    • 5.1 France
    • 5.2 Switzerland
    • 5.3 United Kingdom
    • 5.4 USA
• III. ECONOMIC ANALYSIS OF LAW
  • 1. Basics
  • 2. Economic analysis of settlements – game-theoretical approach
    • 2.1 Main features
      • 2.1.1 Players
      • 2.1.2 Actions and Strategies
      • 2.1.3 Outcome and Payoff
      • 2.1.4 Costs
      • 2.1.5 Information
    • 2.2 Example
    • 2.3 Extensions
    • 2.4 Interim conclusion
• IV. DETAILED ANALYSIS OF GERMANY
  • 1. Settlements and social welfare
    • 1.1 General considerations
    • 1.2 Load removal of the judicial system
    • 1.3 Preservation of legal relationships
    • 1.4 Circumvention of procedural rules
    • 1.5 Particularities in Germany
    • 1.6 Other aspects
    • 1.7 Interim conclusion
  • 2. Analysis of reality
    • 2.1 The German judicial system
    • 2.2 The German law schools
    • 2.3 The German mentality
    • 2.4 Interim conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This paper aims to investigate the reasons behind the unpopularity of settlements in German civil disputes, exploring why litigation is preferred despite potential economic inefficiencies. It examines the economic efficiency of settlements using game theory, comparing the German approach with other countries' legal systems.

• Economic efficiency of settlements in Germany
• Comparison of German settlement practices with other countries
• Game-theoretic analysis of settlement behavior
• Influence of the German legal system and culture on settlement rates
• Social welfare implications of settlement vs. litigation

Zusammenfassung der Kapitel (Chapter Summaries)

I. Introduction: Presents empirical data on the high number of lawsuits in Germany compared to other countries, highlighting the resulting overload on the judicial system and the paper's objective to explore the reasons for the low settlement rates.

II. Legal Background: Outlines various legal possibilities for settlement in Germany, including provisions in the German Civil Code and Code of Civil Procedure, comparing them with approaches in France, Switzerland, the United Kingdom, and the USA.

III. Economic Analysis of Law: Introduces the basic principles of economic analysis of law and uses game theory to analyze the economic efficiency of settlements. A simplified model is presented, illustrating how settlements can be individually and socially beneficial under certain conditions. Different scenarios (e.g., British vs. American cost systems) are considered.

IV. Detailed Analysis of Germany: Explores the social welfare implications of settlements in Germany, examining factors like load removal of the judicial system, the preservation of legal relationships, and the circumvention of procedural rules. It also analyzes particularities of the German legal system and culture that contribute to the low settlement rate.

Schlüsselwörter (Keywords)

Settlements, litigation, economic analysis of law, game theory, German civil procedure, social welfare, legal efficiency, comparative law, German legal culture.

• College: University of Augsburg
• Course: Seminar zur ökonomischen Analyse des Rechts
• Grade: 1,0
• Author: Dominik E. Arndt (Author)
• Publication Year: 2007
• Pages: 33
• Catalog Number: V123781
• ISBN (eBook): 9783640293285
• ISBN (Book): 9783640293544
• Language: English
• Tags: Economic Analysis of Law, Ökonomische Analyse des Rechts, Zivilprozessrecht, ZPO, Civil Procedure Law, Spieltheorie, Ökonomische Analyse von Vergleichen, Jura