COURTS - Lex Mundi: The World's Leading Law Firm Network · 2002-06-23 · Comparative law...

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COURTS

The Lex Mundi Project

Professor Florencio Lopez-de-SilanesYale University and

National Bureau of Economic Research

March 10, 2002

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Justice in some unknown place

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Motivation

● All economics is based on contracts and their enforcement (finance, labor economics, etc..)Example: Coase theorem and Welfare theorems (which are based on people being able to contract in order to improve their welfare).

● Economists discuss endlessly the difficulties of negotiating contracts (e.g. asymmetric information, moral hazard), but normally disregard their enforcement.In economics (including in the Coase theorem), courts are in the background providing free and perfect enforcement.

● This approach sharply contrasts with the reality of Courts around the world which are slow, corrupt and often not used at all.

● This paper will:1. Suggest a way of thinking about Courts as institutions of law

enforcement, and 2. Provide a way of describing their efficiency and their determinants.

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Introduction

● The “Neighbor” model: ● In a theoretical ideal, a dispute between two neighbors can be

resolved by a third on equity grounds, with little knowledge or use of law, no lawyers, no written submissions, no procedural constraints on how evidence, witnesses, and arguments are presented, and no appeal (Shapiro 1981).

● In reality, legal systems heavily regulate dispute resolution: they rely on lawyers and professional judges, regiment the steps that the disputants must follow, regulate the collection and presentation of the evidence, insist on legal justification of claims and judgments, give predominance to written litigation, and so on.

● Such regulations might have profound consequences for the efficiency and fairness of dispute resolution, particularly for the simple disputes material to an average citizen.

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The goals

1. To measure and describe empirically the regulation of dispute resolution around the world (procedural formalism). Focus on simple disputes.

2. To examine empirically the consequences of such regulation for the efficiency and fairness of the judicial system.

3. To interpret evidence in light of alternative theories. Specifically, we are interested in the possibility that transplantation of Western legal procedures is responsible for the observed outcomes.

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The Data

● Measures of formalism:! Request law firms from Lex Mundi in 109 countries to describe exact

procedures used to resolve 2 specific disputes: (i) Eviction of a residential tenant for non-payment of rent, and (ii) collection of a returned check.

● Data on several aspects of judicial quality:• Estimates of expected duration of each case (Lex Mundi)• Other measures of judicial efficiency and fairness (ICRG, Economic

Freedom of World, Humana, Amnesty International, small firms survey)

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Results of the Paper

● Results:1. The Neighbor Model of courts is far from reality; nearly all countries formalize

procedures heavily.2. Empirical confirmation that procedure is more heavily formalized in civil than

in common law countries (Schlesinger, Merryman). 3. Some evidence that the formalism is greater in the less developed than in the

more developed countries.4. Holding the level of per capita income constant, countries with greater

formalism tend to have higher expected duration of dispute resolution, lower survey measures of fairness, and lower access to justice.

5. No systematic evidence that other determinants of judicial efficiency matter.

● Caution: our measures may not capture other aspects of legal efficiency, such as avoidance of errors or the adjudication of complex cases.

● But: The analysis does shed light on access to justice for an ordinary person involved in an ordinary dispute.

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The Neighbor Model

● Shapiro (1981) describes an idealized model of dispute resolution, in which a dispute between two neighbors is resolved by a third guided by common sense and custom.

● “The root concept employed here is a simple one of conflict structured in triads. Cutting quite across cultural lines, it appears that whenever two persons come into a conflict that they cannot themselves solve, one solution appealing to common sense is to call upon a third for assistance in achieving a resolution. So universal across time and space is this simple invention of triads that we can discover almost no society that fails to employ it. And from its overwhelming appeal to common sense stems the basic political legitimacy of courts everywhere. In short, the triad for the purposes of conflict resolution is the basic social logic of courts, a logic so compelling that courts have become a universal political phenomenon”.

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Reasons to deviate from the Neighbor Model

There are 2 broad reasons for formalism:

1. To achieve social goals. ● To punish undesirable conduct● To establish precedents● To reduce errors in adjudication● To promote trade or political uniformity● To prevent subversion by powerful and protect the weak

● Triad justice is vulnerable to economic and political power● “Form is the sworn enemy of arbitrary rule, the twin sister of liberty”

(Rudolf von Jhering)

2. To pursue narrow political objectives● To favor or hurt special groups● To reduce effectiveness of justice

For both good and bad reasons, governments formalize procedures.

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Dimensions of formalism

Good reasons: ● Professional vs. lay judges and lawyers: Advancement of state policies and

shield against subversion by powerful. ● Written vs. oral litigation: Increase accountability and facilitate sovereign

control of judges’ and litigants’ conduct. ● Legal justification: To guarantee that decisions are made in accordance

with legislator’s rather than judge’s preferences. ● Regulation of gathering and presentation of evidence: To prevent biased

selection and harassment of witnesses.● Control of superior review: To ensure that trial court is not biased and that

it follows the law or line of precedents.● Engagement formalities: To guarantee due, verifiable notice to defendant. ● Independent procedural actions: To prevent unfair advantages by

manipulation of process.

Bad reasons: Instruments of control by powerful (race, ethnicity, economic elite, governing bureaucracy, political party, etc.).

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Comparative law literature

● Comparative law literature suggests the extent of formalism varies systematically across legal origins (e.g, Merryman 1985, Damaska 1986,Schlesinger et al. 1988). "Civil law countries generally formalize procedures more heavily than

common law countries.

● Hayek (1960), Merryman (1985), Shlesinger (1988) attribute these differences to:

● ideas of enlightenment and the French Revolution in 18th-19th c.● efforts to isolate judges from law-making when instituting separation

of powers.● more comprehensive codification

● Dawson(1960),Berman(1983),Damaska (1986), Glaeser-Shleifer (2002):● greater formalism due to need to protect law enforcers from coercion

by disputing parties through violence and bribes in 12th-13th c.

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Countries in the sample

Eviction Check

115 115 Initial sample

-6 -6 Law firms that did not accept our invitation to jointhe project and in which country we have not beenable to find another law firm (Burkina Faso,Cambodia, Nicaragua, Scotland, Northern Ireland,St. Kitts and Nevis)

109 109 Final sample

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What did law firms do? (1)

1. Questionnaire designed by the authors with the advice of practicing attorneys (Arg,Bel,Bwa,Col,Mex,US).

2. Model questionnaire and 2 sample answers (US and Colombia) were completed by Lex Mundi members in France, Germany, Jordan, Kenya, and India. Their answers were used to improve the details of the questionnaire.

3. All law firms received the improved sample answers for Colombia,France, Germany and US. The completion required extensive interaction by telephone and email.

4. At each firm, the answers were prepared by a member of the Litigation Department, and reviewed by a member of the General Corporate and Commercial Department, which created an internal check within the firm.

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What did law firms do? (2)

5. Two members of each law firm, from different departments, were required to read, approve, and sign the questionnaire.

6. As an additional check, the law firms were required to indicate when a particular law governed the relevant stage of the procedure, and to provide a copy of that law.

7. The answers provided by member law firms were coded using the description of the procedures as well as the answers to the multiple choice questions.

8. In most cases, this coding was followed by an additional round of questions to the completing attorneys in order to: (i) confirm accurate interpretation of answers and step count, (ii) complete missing information, and (iii) clarify the inconsistencies in their answers.

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Information about the Cases

● Questionnaire covered the step-by-step evolution of an eviction & a check collection procedures before local courts at country’s largest city.

● We provided significant detail: (1) amount of claim; (2) location and main characteristics of the litigants, (3) presence of city regulations; (4) nature of the remedy requested by plaintiff; (5) merit of plaintiff’s and defendant’s claims; (6) social implications of judicial outcomes.

● Aspects of the procedure covered: (1) step by step description of the procedure, (2) estimates of the actual duration at each stage, (3) indication of whether written submissions were required at each stage, (4) indication of specific laws applicable at each stage, (5) indication of mandatory time-limits at each stage, (6) indication of the form and availability of appeal, and (7) the existence of alternative administrative procedures.

● Cases were specified so that plaintiff has fully complied with the agreement (100% right), and defendant has no justification whatsoever. Defendant presents a poorly justified opposition (so default judgment is not an option) and avoids voluntary payment.

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Case facts and circumstances: Eviction

● Written lease duly executed between the parties. ● Monthly rent = 5% of country’s GNP per capita. ● Residential house located in the country’s largest city.● The landlord has fully complied with the agreement (100% compliance). ● The tenant is three months behind in the payment of rent, without

justification. ● The landlord files a lawsuit to regain possession of the premises. ● Tenant attempts to delay service of process but it is finally accomplished. ● Tenant raises some opposition to the complaint (default judgment is not an

option). ● The judge decides every motion for the plaintiff. ● Plaintiff attempts to introduce documentary evidence and to call one

witness. Tenant attempts to call one witness. Neither party presents objections.

● Judgment for the plaintiff. No appeals or post-judgment motions are filed.● Repossession of premises is accomplished.

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Case facts and circumstances: Check collection

● Check (or invoice) value = 5% of country’s GNP per capita. ● Lawful transaction between residents of country’s largest city.● Bank refuses payment for lack of funds.● Plaintiff files a lawsuit to collect the check.● Debtor attempts to delay service of process but it is finally

accomplished. ● Debtor raises some opposition to the complaint (default judgment is

not an option). ● The judge decides every motion for the plaintiff. ● Plaintiff attempts to introduce documentary evidence and to call one

witness. Debtor attempts to call one witness. Neither party presents objections.

● Judgment for the plaintiff. No appeals or post-judgment motions are filed.

● Debt is successfully collected.

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Advantages of focus on 2 specific simple disputes:

1. Exactly the kind of contracts that are taken for granted in economics as freely enforceable.

2. Represent typical situations of default on an everyday contract in a country. • Adjudication of these cases illustrates the nature of enforcement of property

rights and private contracts in a given legal environment. 3. Case facts & assumptions could be standardized to make the cases comparable

across countries regardless of variation in legal traditions.

4. Resolution involves lower level civil trial courts in all countries (unless ADR used). These courts are very relevant to most country citizens.• Focus on such courts is appropriate in a development context.

5. Comparatively simple disputes. • In more complicated disputes, multiple additional issues arise. It is not

appropriate to generalize findings to such disputes.6. Approach preferred to general codification of laws, where comparability across

countries might not be achieved with similar precision.

7. Two distinct cases let us deal with different types of procedures and provided a robustness check.

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Preparation of questionnaire and indices (1)

● Categories were defined based on books on comparative civil procedure:

Blanpain, Roger (Editor). 2000 International Encyclopaedia of Laws- Civil Procedure. The Hague: Kluwer Law International.Cambell, Christian (Editor). 1995. International Civil Procedures. London: Lloyds of London Press LTD. Platto, Charles (Editor). 1992. Civil Appeal Procedures Worldwide. International Bar Association and Graham and Trotman.Platto, Charles (Editor). 1999. Economic Consequences of Litigation Worldwide. International Bar Association and Kluwer Law International.Platto, Charles (Editor). 1990. Trial and Court Procedures Worldwide. London: Graham & Trotman and International Bar Association.Rhyne, Charles. 1978. Law and Judicial Systems of Nations. Washington: The World Peace Law Center.Zuckerman, Adrian (Editor). 1999. Civil Justice in Crisis. Comparative Perspectives of Civil Procedure. New York: Oxford University Press.

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Check Collection (1)

PROFESSIONAL VS LAYMEN

General jurisdiction

court

Professional vs. non-

professional

Legal representation is mandatory

Professionals vs. laymen

United Kingdom 1 1 0 0.67Austria 1 1 0 0.67

WRITTEN VS ORAL

ELEMENTSFiling Service of

processOpposition Evidence Final

ArgumentsJudgment Notification

of judgmentEnforcement of judgment

Written - Oral

Elements

United Kingdom 1 1 1 1 n.a. 0 0 1 0.71Austria 1 1 1 0 n.a. 1 1 1 0.86

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LEGAL JUSTIFICATION

Complaint must be legally justified

Judgment must be legally justified

Judgment must be on law (not on equity)

Legal Justification


STATUTORY REGULATION OF EVIDENCE

Judge can not

introduce evidence

Judge can not reject irrelevant evidence

Out-of-court statements

are inadmissible

Mandatory pre-

qualification of

questions

Oral interrogation

only by judge

Only original documents

and certified copies are admissible

Authenticity and weight of evidence defined by

law

Mandatory recording

of evidence

Statutory Regulation

of Evidence

United Kingdom 0 0 0 0 1 0 0 0 0.13Austria 0 0 0 0 1 1 0 1 0.38

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CONTROL OF SUPERIOR

REVIEW

Enforcement of judgment is automatically suspended until

resolution of the appeal.

Comprehensive review in appeal

Interlocutory appeals are allowed

Control of Superior Review


Engagement Formalities

Mandatory pre-trial

conciliation

Service of process by judicial officer

required

Notification of judgment by judicial

officer requiredEngagement Formalities


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INDEPENDENT PROCEDURAL

ACTIONSFiling and Service

Trial and Judgment

Enforcement Num. of indep. proce. Actions

Independent Procedural

Actions

United Kingdom 2 5 5 12 0.05Austria 6 6 7 19 0.18

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FORMALISM INDEX


Written - Oral

Elements

Legal Justification

Statutory Regulation

of Evidence

Control of Superior Review

Engagement Formalities

Independent Procedural

Actions

Formalism Index

United Kingdom 0.67 0.71 0.33 0.13 0.67 0.00 0.05 2.56Austria 0.67 0.86 1.00 0.38 0.33 0.00 0.18 3.41

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Table 2A&B: Formalism Index

BY LEGAL ORIGIN Eviction Check

English Legal Origin (42) 2.99 2.70Socialist Legal Origin (16) 3.82 3.85French Legal Origin (40) 4.34 4.18German Legal Origin (6) 3.55 3.07Scandinavian Legal Origin (5) 3.29 3.09

Mean all countries (109) 3.55 3.45

Common vs. Socialist -3.96a -5.26a

Common vs. French -7.84a -7.50a

Common vs. German -1.77c -1.10Common vs. Scandinavian -0.87 -1.06

Panel A: Means

Panel B: Tests of Means (t-stats)

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Comparisons Across Income Groups

G N P p c F o rm a l i sm D u ra tio n F o rm a l i sm D u ra tio n(U S $ ) E v ic ti o n E v ic tio n C h e c k C h e c k

L O W IN C O M E C O U N T R IE S

M a la w i 1 8 0 3 .1 2 3 5 2 .9 3 1 0 8U g a n d a 3 2 0 2 .4 9 2 9 2 .5 5 9 9

M o z a m b iq u e 2 2 0 5 .1 0 5 4 0 4 .4 1 5 4 0P e r u 2 1 3 0 5 .3 7 2 4 6 5 .4 1 4 4 1G u a te m a la 1 6 8 0 5 .7 3 2 8 0 5 .6 0 2 2 0

M ID D L E IN C O M E C O U N T R IE S

N e w Z e a la n d 1 3 9 9 0 1 .2 4 8 0 1 .5 5 6 0

P o r tu g a l 1 1 0 3 0 4 .4 8 3 3 0 3 .8 2 4 2 0

R IC H C O U N T R IE S

U n ite dK in g d o m

2 3 5 9 0 2 .2 0 1 1 5 2 .5 6 1 0 1

U n ite d S ta te s 3 1 9 1 0 2 .9 4 4 9 2 .6 0 5 4

A u s tr ia 2 5 4 3 0 3 .6 3 5 4 7 3 .4 1 4 3 4L u x e m b o u r g 4 2 9 3 0 3 .6 2 3 8 0 3 .4 5 2 1 0

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Table 3: Correlations of Formalism and its Components (1)

IndicesFormalism

indexProfessionalsvs. laymen

Writtenvs. oralelements

Legaljustification

Statutoryregulation of

evidence

Control ofsuperiorreview

Engagementformalities

Panel A: Eviction

Professionals vs. laymen 0.6318 a 1.0000Written vs. oral elements 0.6570 a 0.3073 c 1.0000Legal justification 0.6883 a 0.2598 0.3976 a 1.0000Statutory regulation of evidence 0.4192 a 0.1471 0.2390 0.2049 1.0000Control of superior review 0.4576 a 0.2342 0.1009 0.2121 0.0090 1.0000Engagement formalities 0.5983 a 0.2349 0.4041 a 0.2795 0.1995 0.0037 1.0000Independent procedural actions 0.5060 a 0.3174 b 0.3367 b 0.1804 0.1559 0.0988 0.1456

Panel B: Check

Professional vs. laymen 0.7551 a 1.0000Written vs. oral elements 0.7272 a 0.5090 a 1.0000Legal justification 0.7593 a 0.4921 a 0.6083 a 1.0000Statutory regulation of evidence 0.4852 a 0.1845 0.3052 c 0.3184 b 1.0000Control of superior review 0.3347 b 0.1255 -0.0439 0.1051 0.0316 1.0000Engagement formalities 0.6170 a 0.4082 a 0.4391 a 0.2977 c 0.2296 -0.0296 1.0000Independent procedural actions 0.5894 a 0.4009 a 0.3948 a 0.2893 0.2882 0.1074 0.2683

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Table 3: Correlations of Formalism and its Components (2)

IndicesFormalism

indexProfessionalsvs. laymen

Writtenvs. oralelements

Legaljustification

Statutoryregulation of

evidence

Control ofsuperiorreview


Independentproceduralactions

Panel C: Correlations between eviction and check indices

Formalism index 0.8285 aProfessionals vs. laymen 0.5229 aWritten vs. oral elements 0.7054 aLegal justification 0.7502 aStatutory regulation of evidence 0.9086 aControl of superior review 0.7866 aEngagement formalities 0.8126 aIndependent procedural actions 0.8899 a

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Table 4: Eviction and Check by Legal Origin and Income Level

MEANS BY GNP LEVEL Eviction Check Eviction Check Eviction Check

Low Income - Bottom 25 Pctile 3.66 3.67 3.17 3.09 4.39 4.47Medium Income - Middle 50 Pctile 3.92 3.65 3.15 2.66 4.56 4.34High Income - Top 75 Pctile 3.11 2.82 2.49 2.28 3.58 3.26Mean all countries 3.65 3.45 2.99 2.70 4.34 4.18

Bottom 25 vs. Middle 50 -1.20 0.07 0.05 1.51 -0.57 0.36Bottom 25 vs. Top 25 2.66b 3.92a 2.83a 3.15a 2.72b 4.20a

Middle 50 vs. Top 25 3.71a 3.35a 2.09b 1.16 2.92a 2.58b

Means

Tests of Means (t-stats)

All Countries English Legal Origin French Legal Origin

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Table 5B: Collection of a check- Indices regressions (1)

Independent variables:

Dependentvariables:

Log GNPper capita

Socialistlegal origin

French legalorigin

German legal origin

Scandinavianlegal origin

Constant N[R2]

Formalism index

-0.2008a(0.0585)

5.1143a(0.5057)

109[0.08]

-0.1959a(0.0491)

1.0493a(0.1925)

1.4932a(0.1872)

0.7277a(0.2406)

0.8131a(0.2959)

4.2942a(0.3960)

109[0.47]


-0.0412b(0.0164)

0.9077a(0.1404)

109[0.05]

-0.0420b(0.0185)

0.2154a(0.0462)

0.2568a(0.0656)

0.1473(0.0899)

0.1939b(0.0952)

0.7712a(0.1555)

109[0.21]

Written vs. oral elements

-0.0117(0.0099)

0.8112a(0.0845)

109[0.01]

-0.0162(0.0099)

0.1386a(0.0373)

0.2751a(0.0343)

0.2207a(0.0726)

0.1330a(0.0467)

0.7090a(0.0767)

109[0.42]

Legal justification

-0.0316(0.0209)

0.8984a(0.1715)

109[0.02]

-0.0328c(0.0193)

0.3533a(0.0852)

0.3809a(0.0586)

0.3609a(0.1191)

0.1824(0.1684)

0.6884a(0.1615)

109[0.32]

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Table 5B: Collection of a check- Indices regressions (2)


Dependentvariables:

Log GNPper capita

Socialistlegal origin

French legalorigin

German legal origin

Scandinavianlegal origin

Constant N[R2]

Statutory regulation of evidence

-0.0397a(0.0103)

0.6846a(0.0861)

109[0.12]

-0.0402a(0.0115)

0.0437(0.0398)

0.1080a(0.0355)

0.0965(0.0656)

0.0009c(0.0557)

0.6376a(0.0915)

109[0.20]

Control of superiorreview

-0.0224(0.0159)

0.8891a(0.1340)

109[0.01]

-0.0131(0.0169)

0.2687a(0.0456)

-0.0486(0.0615)

-0.1589c(0.0864)

0.2119b(0.0940)

0.7893a(0.1357)

109[0.21]


-0.0243(0.0167)

0.4550a(0.1438)

109[0.02]

-0.0262b(0.0138)

-0.0866c(0.0446)

0.3579a(0.0482)

0.0235(0.0745)

0.0540(0.0852)

0.3485a(0.1175)

109[0.47]

Independent procedural actions

-0.0299a(0.0095)

0.4683a(0.0878)

109[0.06]

-0.0253b(0.0097)

0.1161b(0.0510)

0.1629a(0.0387)

0.0378(0.0333)

0.0368(0.0334)

0.3501a(0.0819)

109[0.21]

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Table 6B: Check collection - Duration in practice

BY LEGAL ORIGIN Duration until completion of service of process

Duration of trial Duration of enforcement (from judgment to actual enforcement)

Total Duration

English Legal Origin 26 88 62 176Socialist Legal Origin 42 169 116 327French Legal Origin 34 147 90 272German Legal Origin 26 92 75 193Scandinavian Legal Origin 27 101 42 170

Mean all countries 31 122 80 234

Common vs. Socialist -1.74c -2.37b -2.91a -2.85a

Common vs. French -0.93 -2.66a -2.16b -2.94a

Common vs. German 0.03 -0.13 -0.52 -0.30Common vs. Scandinavian -0.05 -0.39 0.76 0.10


Panel A: Means (Check)

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Table 6A: Eviction of a tenant - Duration in practice

BY LEGAL ORIGIN Duration until completion of service of process

Duration of trial Duration of enforcement (from judgment to actual enforcement)

Total Duration

English Legal Origin 26 112 61 199Socialist Legal Origin 47 187 113 347French Legal Origin 27 167 72 266German Legal Origin 19 230 107 357Scandinavian Legal Origin 14 139 33 187

Mean all countries 29 151 74 254

Common vs. Socialist -2.05b -1.84c -2.46b -2.42b

Common vs. French -0.16 -1.66 -0.77 -1.64Common vs. German 0.47 -2.49b -1.65 -2.36b

Common vs. Scandinavian 0.76 -0.52 0.95 0.17


Panel A: Means (Eviction)

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Table 7: Other Outcomes (1)

BY LEGAL ORIGIN Judicial efficiency

Citizen's access to justice

Enforcement of contracts

Corruption Human Rights

English Legal Origin 7.94 3.93 6.56 6.28 3.79Socialist Legal Origin . 6.88 4.85 6.37 3.50French Legal Origin 6.61 3.09 5.30 5.41 3.28German Legal Origin 8.90 7.08 7.50 8.03 4.50Scandinavian Legal Origin 10.00 10.00 8.12 10.00 4.80

Mean all countries 7.55 4.35 6.07 6.24 3.97

Common vs. Socialist n.a. -1.79c 2.13b -0.10 0.29Common vs. French 2.54b 1.01 2.74a 1.72c 1.31Common vs. German -0.96 -2.25b -1.20 -1.86c -1.24Common vs. Scandinavian -1.96c -4.16a -1.78c -3.80a -1.62


Panel A: Means

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Table 7: Other Outcomes (2)

BY LEGAL ORIGIN Fair and Impartial Honest or Uncorrupt

Quick Affordable Consistent

English Legal Origin 4.02 3.87 2.78 3.23 3.52 3.76 4.03Socialist Legal Origin 3.08 2.95 2.28 3.13 2.97 3.40 3.46French Legal Origin 3.08 3.07 2.01 2.94 2.88 3.31 3.77German Legal Origin 3.76 3.92 2.44 2.16 2.92 3.04 3.69Scandinavian Legal Origin 4.16 4.65 2.57 3.20 3.86 3.33 4.16

Mean all countries 3.43 3.35 2.34 3.07 3.13 3.48 3.79

Common vs. Socialist 4.70a 3.98a 1.81c 0.56 2.39b 1.91c 2.76a

Common vs. French 4.64a 3.50a 3.44a 1.80c 3.34a 2.49b 1.55Common vs. German n.a. n.a. n.a. n.a. n.a. n.a. n.a.Common vs. Scandinavian n.a. n.a. n.a. n.a. n.a. n.a. n.a.


Panel A: Means

Court Decisions

are enforced

Confidence in legal system

Legal system is

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Table 8: Outcomes and the Formalism Index – Check Collection (1)


Dependentvariables:

Log GNP percapita

Formalismindex

Constant N[R2]

Log of duration0.0246

(0.0393)0.3119a

(0.0538)3.9070a(0.3832)

109[0.17]

Judicial efficiency0.8032a(0.1355)

-0.5304a(0.1463)

2.4239(1.5811)

56[0.55]

Access to justice1.5878a(0.1795)

-0.5128b(0.2404)

-6.9969a(1.8600)

77[0.54]

Enforceability ofcontracts

0.7579a(0.0742)

-0.5309a(0.0872)

1.4290c(0.8121)

52[0.79]

Corruption0.9642a(0.1085)

-0.5742a(0.1547)

0.3153(1.1934)

86[0.62]

Human Rights 0.4712a(0.0686)

-0.1947(0.1445)

0.3942(0.9503)

57[0.46]

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Table 8: Outcomes and the Formalism Index – Check Collection(2)


Dependent variables: Log GNP per capita Formalism index Constant N[R2]

Legal system is fairand impartial

0.0695(0.0504)

-0.4267a(0.0619)

4.4737a(0.4438)

65[0.32]

Legal system is honestor uncorrupt

0.1901a(0.0569)

-0.3968a(0.0639)

3.3506a(0.5035)

65[0.33]

Legal system is quick-0.0132(0.0839)

-0.2533a(0.0699)

3.3848a(0.7102)

65[0.12]

Legal system isaffordable

-0.1324a(0.0472)

-0.0889(0.0572)

4.4248a(0.3908)

65[0.13]

Legal system isconsistent

0.0771(0.0578)

-0.2681a(0.0573)

3.5306a(0.4946)

65[0.19]

Court decisions areenforced

0.0927c(0.0542)

-0.1945a(0.0566)

3.4803a(0.4101)

65[0.14]

Confidence in legalsystem

0.1324b(0.0527)

-0.1328b(0.0587)

3.2633a(0.4688)

65[0.14]

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Table 9: Outcomes and the Formalism Index-Instrumental Variables Regressions – Check (1)


Dependent variables: Log GNP percapita

Formalism index Constant N[R2]


(0.0440)0.3226a(0.1089)

3.8523a(0.6202)

109[0.17]


-0.9124a

(0.2656)4.3052b(1.7951)

56[0.51]


-0.5271(0.3595)

-6.9249a(2.2042)

77[0.54]


0.6970a(0.0752)

-0.8076a

(0.1552)2.9185a(0.9409)

52[0.76]


-0.6952a

(0.2287)0.9154

(1.4005)86

[0.61]

Human Rights 0.4458a(0.0693)

-0.4441b

(0.1869)1.4561

(1.0457)57

[0.41]

39

Table 9: Outcomes and the Formalism Index-Instrumental Variables Regressions – Check (2)


Dependent variables: Log GNP percapita

Formalism index Constant N[R2]

Legal system is fair andimpartial

0.0686(0.0523)

-0.6060a

(0.1236)5.1460a(0.5253)

65[0.27]

Legal system is honestor uncorrupt

0.1892a(0.0583)

-0.5799a

(0.1326)4.0369a(0.6266)

65[0.28]

Legal system is quick-0.0141(0.0835)

-0.4463a

(0.1459)4.1084a(0.9362)

65[0.05]

Legal system isaffordable

-0.1326a(0.0473)

-0.1237(0.0942)

4.5553a(0.4463)

65[0.12]

Legal system isconsistent

0.0764(0.0585)

-0.4165a

(0.1207)4.0869a(0.6271)

65[0.14]

Court decisions areenforced

0.0922c(0.0546)

-0.2975a

(0.1032)3.8664a(0.4958)

65[0.11]

Confidence in legalsystem

0.1319b(0.0533)

-0.2325b

(0.0949)3.6369a(0.5544)

65[0.11]

40

Check: Partial Scatter Plot (1)

coef = .31186246, (robust) se = .05376143, t = 5.8

Log

of D

urat

ion

(ort

hogo

nal

comp

onen

t)

Formalism (orthogonal component)-2.40529 2.26452

-3.26529

1.75909

HKG BLZ

ZMB

ZAF

TTO

NZLTCAUGA

AIA

GHA

AUS

B MU

JAM

MYSM WI

CAN

TUR

NGAKEN

BRB

TWN

MLT

VN M

GIB

GEOZWE

BGDVGB

GRDIND

SGP

IRLGBR

THA

ANTDNK

BRACHN

USA

BELCYM

MCO

TZA

PAK

RUSCIV

SWEUKR

JOR

JPN

NOR

HUN

NLD

LKA

KOR

FIN

SWZ

IDNEGY

VCT

CHE

HRVISR

FRA

NA M

LVA

COLAUTCYP

DO M

M OZ

DEU

TUN

URY

LUX

ARE

B WA

PRT

CZERO M

POL

K WTGRCSENESTBGR

ITA

LTUMARHND

SLV

SVN

BHR

ISL

CHL

ECU

PHL

KAZ

MEX

LBN

PER

ARGCRIBOL

ESP

GT MPANPRY

VEN

41


coef = -.53041984, (robust) se = .14625338, t = -3.63

Judi

cial

Eff

icie

ncy

Inde

x

(ort

hogo

nal

comp

onen

t)


-3.41737

2.7019

HKG

ZAF

TTO

NZL

AUS

GHA

JAM

MYS

CAN

TUR

NGA

KEN

ZWE

IND

SGP

IRL

GBRDNK

THA

USA

BRA

BEL

SWE

PAK

CIV

JOR

JPNNORNLD

KOR

FINLKA

CHE

IDN

EGY

ISR

FRA

AUTCOL

DEUDO M

URY

PRT

K WTGRC

ITA

MAR

CHLECU

PHLMEX

PER

ARG

ESP

PAN

VEN

42


coef = -.51283766, (robust) se = .24037457, t = -2.13

Inde

x of

Acc

ess

to J

usti

ce

(ort

hogo

nal

comp

onen

t)


-7.44138

5.84111

HKG

BLZ

ZMB

ZAF

TTONZL

UGAAUS

GHA

JAMMYS

CAN

M WI

TUR

NGAKEN

TWN

MLT

ZWEIND

SGP

IRL

GBR

THA

DNK

BRA

USA

BEL

PAK

TZASWE

CIV

JORJPN

NORNLDHUN

KORFIN

LKAIDN

CHE

EGY

ISR

FRAAUT

COL

CYP

DEUDO M

TUN

URY

B WAPRT

RO M

POL

GRC

SEN

BGR

ITA

MAR

SLV

HND

ISL

CHLECU

PHL

MEX

PERARG

CRI

ESP

BOL

GT M

PAN

PRY

VEN

43


coef = -.53093483, (robust) se = .08716658, t = -6.09

Inde

x of

Enf

orce

abil

ity

of C

ontr

acts

(ort

hogo

nal

comp

onen

t)


-2.17017

1.98234

ZAF

AUS

MYS

NGA

CAN

TUR

KEN

VN M

TWN

IND

THAIRLSGP

GBR

CHN

BRA

DNKBEL

USA

PAK

CIV

SWE

HUNJPN

NORNLD

IDN

KOR

FINEGY

CHE

ISR

FRA

COL

AUTDEU

PRT

POLGRC

MAR

ITA

ECU

CHL

PHLKAZ

MEXLBN PER

ARG

BOL

ESP

VEN

44


coef = -.57420864, (robust) se = .15474051, t = -3.71

Corr

upti

on I

ndex

(ort

hogo

nal

comp

onen

t)


-3.34108

3.47192

HKG

ZAF

ZMB

NZL

TTO

AUSUGAGHA

JAM

CAN

MYS

TUR

M WI

NGATWN

KEN

MLT

VN M

ZWE

IND

SGP

IRL

GBR

DNK

THA

USA

BEL

BRA

CHN

SWE

PAK

TZA

JPN

CIV

NOR

JOR

NLD

HUN

FIN

KOR

CHE

LKA

IDN

EGY

ISRFRA

NA M

AUT

CYP

COL

DEU

DO M

LUX

TUN

URY

ARE

M OZ

B WA

PRT

CZE

K WT

POL

RO MGRC

SEN

ITA

BGR

MAR

BHR

SLV

HND

ISL

CHL

ECU

PHLMEXLBN

PER

ARG

CRI

ESP

BOLGT M

PAN

PRY

VEN

45


coef = -.19468721, (robust) se = .14453243, t = -1.35

Huma

n Ri

ghts

(Am

nest

y 19

93)

(ort

hogo

nal

comp

onen

t)


-2.52325

1.53136

ZAF

NZLZMBAUSCANUGA

MYSGHA

TUR

TWN NGA

SGPKENIRLGBR

DNK

USABEL

VN MZWE

BRAIND

THA

SWEJPN

NOR

CHN

NLD FIN

CHE

KOR

JOR

PAKFRA

ISR

EGY

AUT

IDN

DEU

COL

PRT

K WT

GRC

M OZ

ITA

ISL

CHL

HND

ECU

PHL

MEXLBN

ESP

ARG

PER

PAN

VEN

46


coef = -.42665762, (robust) se = .06190655, t = -6.89

Lega

l Sy

stem

is

Fair

and

Imp

arti

al

(ort

hogo

nal

comp

onen

t)


-1.64229

1.84195

BLZ

ZAF

TTO CANZMB

MYS

TUR

SGP

UGA

GHAGBR

USA

SWE

M WI

NGA

KENBRA

GEO

THAZWEBGDIND

FRA

CHN

RUS

HUNDEU

HRVUKR

CIV

PAK

EGY

TZA

NA M

IDN

PRTURYCOLDO MITA

CZE

TUN

B WA

POL

SVN

RO M

EST

LTU

BGR

CHL

SLV

SEN

HND

MEX

ECUKAZ

PHL

ESP

ARG

CRI

PER

PAN

GT MBOL

VEN

47


coef = -.39683025, (robust) se = .06397115, t = -6.2

Lega

l Sy

stem

is

Hone

st a

nd U

ncor

rupt

(ort

hogo

nal

comp

onen

t)


-1.36522

1.68556

BLZ

ZAF

TTO CAN

ZMB

MYS

TUR

SGP

UGA

GHAGBR

USA

SWEM WI

NGA

KENBRAGEO

THAZWE

BGD

IND

FRA

CHN

RUS

HUN

DEU

HRV

UKR

CIV

PAK

EGY

TZA

NA M

IDN

PRT

URY

COL

DO M

ITACZE

TUN

B WA

POL

SVN

RO M

EST

LTU

BGR

CHL

SLV

SEN

HND

MEXECU

KAZ

PHL ESP

ARG

CRI

PER

PAN

GT M

BOLVEN

48


coef = -.25327171, (robust) se = .06985273, t = -3.63

Lega

l Sy

stem

is

Quic

k

(ort

hogo

nal

comp

onen

t)


-1.06768

3.18481

BLZ ZAFTTO

CAN

ZMB

MYS

TUR

SGP

UGA

GHA

GBRUSASWE

M WI

NGA

KEN

BRA

GEOTHA

ZWE

BGD

INDFRA

CHN

RUSHUN

DEU

HRV

UKRCIV

PAK

EGY

TZA

NA M

IDN

PRT

URYCOL

DO M

ITA

CZE

TUN

B WA

POLSVN

RO MESTLTU

BGRCHLSLV

SEN

HND

MEX

ECU

KAZPHL

ESP

ARG

CRI

PER

PAN

GT M

BOLVEN

49


coef = -.08887946, (robust) se = .05723518, t = -1.55

Lega

l Sy

stem

is

Affo

rdab

le

(ort

hogo

nal

comp

onen

t)


-1.09517

1.24214

BLZ

ZAF

TTO

CANZMB

MYSTUR

SGP

UGA

GHA

GBR

USA

SWE

M WI

NGA

KEN

BRA

GEO

THA

ZWE

BGD

IND

FRA

CHN

RUS

HUN

DEU

HRV

UKR

CIV

PAK

EGY

TZA

NA M

IDN

PRT

URY

COL

DO M

ITA

CZE

TUN

B WA

POL

SVN

RO MEST

LTUBGRCHL

SLV

SEN

HND

MEX

ECU

KAZ

PHL

ESP

ARG

CRI

PERPAN

GT M

BOL

VEN

50


coef = -.26810673, (robust) se = .05731713, t = -4.68

Lega

l Sy

stem

is

Cons

iste

nt

(ort

hogo

nal

comp

onen

t)


-1.05623

1.76139

BLZ

ZAF

TTO

CAN

ZMBMYS

TUR

SGP

UGA

GHA

GBRUSA

SWEM WI

NGA

KEN

BRAGEO

THA

ZWE

BGD

IND

FRA

CHN

RUS

HUN

DEUHRVUKR

CIV

PAK

EGY

TZA

NA M

IDN

PRT

URYCOLDO M

ITACZE

TUNB WA

POL

SVN

RO M

EST

LTU

BGR

CHL

SLV

SEN

HND

MEXECUKAZ

PHL

ESP

ARG

CRI

PER

PAN

GT M

BOLVEN

51


coef = -.19446332, (robust) se = .0565739, t = -3.44

Cour

t De

cisi

ons

are

Enfo

rced

(ort

hogo

nal

comp

onen

t)


-1.0297

1.53208

BLZ

ZAF

TTO

CAN

ZMB

MYSTUR

SGP

UGA

GHA

GBRUSA

SWE

M WINGA

KEN

BRA

GEO

THAZWE

BGD

IND

FRA

CHN

RUS

HUN

DEU

HRVUKR

CIV

PAK

EGY

TZANA M

IDN

PRT

URY

COL

DO M

ITACZE

TUN

B WA

POL

SVN

RO MESTLTU

BGR

CHL

SLV

SEN

HND

MEX

ECUKAZ

PHL

ESP

ARG

CRI

PER

PANGT M

BOL

VEN

52


coef = -.13282287, (robust) se = .05872226, t = -2.26

Conf

iden

ce i

n Le

gal

Syst

em

(ort

hogo

nal

comp

onen

t)


-1.17447

1.29959

BLZ

ZAF

TTOCAN

ZMB

MYS

TUR

SGP

UGA

GHA

GBR

USASWE

M WI

NGA

KENBRA

GEO

THA

ZWE

BGDIND

FRA

CHN

RUS

HUN

DEU

HRV

UKR

CIV

PAKEGY

TZA

NA M

IDNPRT

URYCOLDO M

ITA

CZE

TUN

B WA

POL

SVNRO M

EST

LTU

BGR

CHL

SLV

SEN

HND

MEX

ECU

KAZ

PHL

ESP

ARG

CRI

PER

PANGT M

BOLVEN

53

Conclusion (1)

I. Measure procedural formalism in 109 countries in cooperation with law firms from Lex Mundi:● Describe the exact procedures used to resolve 2 specific disputes:

1. Eviction of a residential tenant for non-payment of rent 2. Collection of a returned check.

● Using the data obtained from law firms, we construct measures oflegal structure, seen as the extent of procedural formalism.

● Results:1. The Neighbor Model of courts is far from reality; all countries

formalize adjudication heavily.2. Empirical confirmation that formalism is greater in civil than in

common law countries. 3. Some evidence that formalism is greater in less developed

countries.

54

Conclusion (2)

II. Use the data to examine several aspects of judicial quality:• Estimates of expected duration of each case (Lex Mundi).• Other measures of judicial efficiency and fairness.

● Results. Holding the level of per capita income constant, countries with more formalism tend to have :• Higher expected duration of dispute resolution • Lower survey measures of judicial efficiency and access to justice• Lower fairness, impartiality, consistency, and speed of judgments,

as perceived by small firms• Poorer enforcement of judicial decisions and protection of human

rights, higher corruption, and lower confidence of small firms in the legal system.

55

Conclusion (3)

III. Interpretation of results.● Caution: our measures may not capture other aspects of legal

efficiency, such as avoidance of errors or the adjudication of complex cases.


● Bottom line:o We did not find evidence that formalism buys justice.o Seems to be that the transplantation of legal procedures

during colonization had many undesirable effects.

56

Conclusion (3)

III. Interpretation of results.● Caution: our measures may not capture other aspects of legal

efficiency, such as avoidance of errors or the adjudication of complex cases.


● Bottom line: Seems to be that the transplantation of legal procedures during colonization had many undesirable effects.

57

Mapping with the Encyclopedia of Laws (1)

Encyclo pedia o f Law s – C ivilProcedu re (Fran ce)

Variab les in the paper Indices in the pap er

Part I. Jud icial Organ ization 1. The Courts an d Their M embers 2. The Bar 3. Law Off icia ls

Variab le: Pro fess ional vs . non-p ro fessional judgeVariab le: Legal rep resentation is mandato ryVariab le: Serv ice o f p rocess by jud icia l off icer req u iredVariab le: No tification of ju dgmen t b y jud icial o fficer requ ired

FI: Pro fess ionals v s. lay menFI: Pro fess ionals v s. lay menFI: Engagement fo rmalitiesFI: Engagement fo rmalities

Part II : Ju ris d iction 1. Domestic Ju risd ictio n 2. In ternational Ju risd iction

Variab le: General ju ris d iction cou rtNo t covered : Lex Mund i Pro ject analyzed simp le lo cal d isputes on ly

FI: Pro fess ionals v s. lay men

Part II I: Action s and Claims 1. Action s

2. Claims and Defenses

3. Sanctions and Proced uralI rregu larities

No t covered : R ight to sue assumed by case facts. Co llective ac tions ou ts ide o f scope of Le x mund i Pro ject, wh ich

analyzed s imp le local d ispu tes on ly .Variab les: Filin g and op positionVariab le: Complain t mu st be leg ally ju stif iedVariab les: M an dato ry time limits

FI: W ritten vs . o ral elementsFI: Legal ju stificationOther: Mandato ry time limits

Part IV: Proceed in gs 1. Pre-trial Pro ceed ings:

Co nciliation befo re trial 2. Pro ceed ings in First Instance

3 . Rev iew P roceed ings (ap peal)

Variab le: M an datory p re-trial co nciliation

Variab les: Filin g , serv ice, oppo sitio n , fin al argumen ts, judgmen t, no tificationo f jud gment.

Variab le: Complain t mu st be leg ally ju stif iedVariab le: Judg men t must be legally ju stif iedVariab le: Judg men t must be on law (not on equ ity )Variab le: In dep endent p rocedu ral actions fo r f ilin g an d serv iceVariab le: In dep endent p rocedu ral actions fo r trial and ju dg mentVariab le: Duratio n o f f ilin g and serv iceVariab le: Duratio n o f trial and judgmentVariab le: Serv ice o f p rocess by jud icia l off icer req u iredVariab le: No tification of judg men t by ju d ic ial o fficer requ iredVariab le: Defendant’s economic situation is cons idered at judgmentVariab le: En fo rcement o f judg ment is au tomatically suspen ded until

reso lu tion o f th e appealVariab le: Comprehens ive rev iew in appealVariab le: In terlo cu to ry appeals are allowed

FI: Engagement fo rmalities

FI: W ritten vs . o ral elements

FI: Legal ju stificationFI: Legal ju stificationFI: Legal ju stificationFI: Independen t pro cedural actionsFI: Independen t pro cedural actionsOutco mes: Du ration in p racticeOutco mes: Du ration in p racticeFI: Engagement fo rmalitiesFI: Engagement fo rmalitiesOther: Defendan t p ro tectionFI: Contro l o f superio r rev iew

FI: Contro l o f superio r rev iewFI: Contro l o f superio r rev iew

Part V: Inciden ts M ostly no t covered : Ou ts ide standard ized facts included in questionn aireVariab le: In terlo cu to ry appeals are allowed FI: Contro l o f superio r rev iew

58

Appendix

59

Mapping with the Encyclopedia of Laws (2)

E nc yc lo pe dia o f Law s – C iv i lP roc e du re (F ran ce)

V ariab le s in the p ap er In d ic es in th e pa pe r

Pa rt V I : L ega l Co sts and L e ga l A id 1 . L e ga l Costs

2 . L e ga l A id

V a ria b le : L e ga l re p rese nta t ion is m an da to ryV a ria b le : A ttorn ey fe es a re fixed or lim ite d b y sta tu te , c ou rt o r a d min is tra t iv e

reg u lat io nV a ria b le : M ost c o mmo n rem u ne ra t ion o f l it ig at io n at to rn ey sV a ria b le : Q u ota li t is o r c on ting e nt fe e ag re emen tsV a ria b le : L o ose r p ay s ru leV a ria b le : Fu lly co mp ensa tory in te restsV a ria b le : M an da tory le g a l a id a va ila b le by la w o r b y ord e r o f the cou rt

FI: Pro fess ion a ls v s. la y menO th e r: A tto rney ’s in cen t ive s

O th e r: A tto rney re m u ne ra t io nO th e r: Q uo ta l it isO th e r: O th e r de te rm in an tsO th e r: O th e r de te rm in an tsO th e r: D efen da n t p ro te ct io n

Pa rt V I : E v id en ce 1 . Bu rd en o f Pro o f

2 . A d m iss ib ility o f Ev id e n ce

3 . A d m in istra t ion o f Ev id e n ce

V a ria b le : A uthent ic ity an d w e igh t of ev id e nc e de fin ed b y la wV a ria b le : Ju dg e ha s th e in depe n de nt le g a l o b lig at io n to in ve st iga te fa c tsV a ria b le : Ju dg e ca n no t in tro du ce e v ide nc eV a ria b le : Ju dg e ca n no t re je ct i rre le v an t e v id en ceV a ria b le : O u t -o f-c ou rt sta te m e nts a re in ad m iss ib leV a ria b le : O n ly o rig in a l d oc u me n ts a n d ce rt ifie d c op ie s a re a d mis sib leV a ria b le : M an da tory p re -qu a lif ica t ion o f qu est io nsV a ria b le : M an da tory re c ord in g of ev id en ce V a ria b le : O ra l in te rro ga tion on ly b y ju d geV a ria b le : E v id en ce

FI: S ta tutory re gu la t io n o f e v id en ceO th e r: D efen da n t p ro te ct io nFI: S ta tutory re gu la t io n o f e v id en ceFI: S ta tutory re gu la t io n o f e v id en ceFI: S ta tutory re gu la t io n o f e v id en ceFI: S ta tutory re gu la t io n o f e v id en ceFI: S ta tutory re gu la t io n o f e v id en ceFI: S ta tutory re gu la t io n o f e v id en ceFI: S ta tutory re gu la t io n o f e v id en ceFI: W rit ten vs . o ra l e le m e nts

Pa rt V I II: Pa rt icu la r Pro cee d ing s N o t c ove re d : L e x M un d i Pro je c t co vere d on ly e v ict io n a n d che c k co lle c t io np roc e ed ings

Pa rt IX : E n fo rce m e nt o f Jud g me nts a ndPre l im in ary Se izu re fo r Secu rity 1. En fo rce me n t of D o mest ic

Ju dg me n ts

2. Pro te ct iv e M ea sure s 3. Re c ogn it io n an d En fo rc ement o f Fo re ig n Jud g ments

V a ria b le : In d ep en de nt p roc edu ra l ac t ion s fo r e n fo rcem ent o f ju dg m e ntV a ria b le : D u ra t io n o f e n force m e nt o f ju dg men tV a ria b le : E n fo rcem ent o f ju dg m e nt. V a ria b le : D e fen da nt’s ec on o mic si tua t ion is co ns ide re d at e nfo rc e me n t of

ju d g me ntV a ria b le : E n fo rcem ent o f ju dg m e nt is au to ma tic a lly suspe n de d u ntil

re so lu t ion o f th e ap pe a l.V a ria b le : T ra n sfe r o f d eb to r’s p ro perty o n ly th rou gh pu b lic a uc t io nV a ria b le : M an da tory e xc lu sio n o f d e fe nd an t ’s esse ntia l su rv iva l asse tsV a ria b le : A ttac h me n t o f d e btor’s p roperty on ly a fte r ju dg me n tN o t c ove re d : L e x M un d i Pro je c t an a ly zed sim p le lo ca l d isp utes o n ly

FI: Ind e pe nd en t pro c ed ura l a ct io nsO utco m e s: D u ra t io n in p rac t ice FI: W rit ten vs . o ra l e le m e nts O th e r: D efen da n t p ro te ct io n

FI: Co ntro l o f su perio r rev iew

O th e r: D efen da n t p ro te ct io nO th e r: D efen da n t p ro te ct io nO th e r: D efen da n t p ro te ct io n

Pa rt X : A rb itra t io n N o t c ove re d : L e x M un d i Pro je c t focu sed on ju d ic ia l p roc ed u resV a ria b le : A d min istra t iv e p ro ce d ure s O th e r: O th e r de te rm in an ts

60

Other determinants of judicial efficiency

● Statutory defendant protection measures might be valued by society, even at the expense of speed of adjudication, since they might increase fairness and reduce disparity between rich plaintiffs and poor defendants.

● Patterns of compensation of attorneys may create incentives to delay the pace of proceedings (hourly fees and per-activity compensation), or to pursue futile litigation (contingent fee agreements).

● Mandatory time-limits for litigants and judges at various stages of the procedure may deter dilatory tactics.

● Indexation of claims and “loser pay” rules may incentive early settlements by defendants with little chances of winning the case.

● The availability of alternative administrative procedures may liberate judicial resources by reducing court filings.

61

TABLE 11B: Check - Defendant Protection

BY LEGAL ORIGIN - CHECK

Manda. legal aid avail. law or

order of judge or admin. office

Attor. fees fixed or lim.

by stat. court or adm. reg.

Judge has indep. legal oblig.

investigate facts

Attach. of defend.

proper. after judgment

Transfer of defen. proper. only through

public auction

Manda. Exclu. defendant's esen. assets

Index Defen. Protec.

English Legal Origin (39) 0.41 0.44 0.13 0.87 0.69 0.64 0.53Socialist Legal Origin (16) 0.44 0.25 0.56 0.25 0.75 0.81 0.51French Legal Origin (39) 0.64 0.44 0.33 0.23 0.87 0.82 0.56German Legal Origin (6) 0.50 0.50 0.17 0.67 0.83 0.50 0.53Scandinavian Legal Origin (5) 1.00 0.60 0.00 0.40 0.80 0.60 0.57

Mean all countries (105) 0.53 0.42 0.27 0.50 0.78 0.72 0.54

Common vs. Socialist -0.18 1.28 -3.70a 5.62a -0.42 -1.24 0.36Common vs. French -2.07b 0.00 -2.19b 7.35a -1.94c -1.80c -0.64Common vs. German -0.41 -0.29 -0.25 1.29 -0.70 0.65 0.03Common vs. Scandinavian -2.62b -0.68 0.84 2.73a -0.49 0.18 -0.43

Panel A: Means


62

TABLE 11B: Check - Common Way to Remunerate Attorneys

BY LEGAL ORIGIN - CHECK Hourly

rate.

A percentage of the

judgment.A lump sum for the

entire proce.Per activity performed.

English Legal Origin (39) 0.41 0.10 0.36 0.13Socialist Legal Origin (16) 0.19 0.19 0.50 0.13French Legal Origin (39) 0.15 0.31 0.41 0.13German Legal Origin (6) 0.17 0.17 0.33 0.33Scandinavian Legal Origin (5) 0.80 0.20 0.00 0.00

Mean all countries (105) 0.29 0.20 0.38 0.13

Common vs. Socialist 1.59 -0.85 -0.96 0.03Common vs. French 2.59b -2.29b -0.46 0.00Common vs. German 1.14 -0.46 0.12 -1.29Common vs. Scandinavian -1.66 -0.63 1.63 0.84

Panel A: Means


63

TABLE 11B: Check - Quota Litis or “Contingent Fee” Agreements


Allowed without

restriction.

Allow. law subject to legisl. ceiling or

restric.

Prohib. only remu. allow. when ancillary or supplem. other valid form

of remun.

Prohibited in all

cases.

English Legal Origin (39) 0.26 0.21 0.10 0.44Socialist Legal Origin (16) 0.69 0.13 0.06 0.13French Legal Origin (39) 0.49 0.18 0.13 0.18German Legal Origin (6) 0.33 0.17 0.17 0.33Scandinavian Legal Origin (5) 0.40 0.20 0.00 0.40

Mean all countries (105) 0.42 0.18 0.10 0.29

Common vs. Socialist -3.21a 0.69 0.46 2.26bCommon vs. French -2.14b 0.28 -0.35 2.52bCommon vs. German -0.39 0.21 -0.46 0.46Common vs. Scandinavian -0.67 0.03 0.74 0.15

Panel A: Means


64

TABLE 11B: Check - Mandatory Deadlines


Term admission of lawsuit

Term present

evidence

Term present defense

Term judgm

ent

Term notifi.

Judgment

Index: Manda. Time Limits

Admi. check collec. proce.

Fully compen.

Inter.

English Legal Origin (39) 0.03 0.13 0.56 0.18 0.15 0.21 0.03 0.59Socialist Legal Origin (16) 0.38 0.06 0.69 0.63 0.38 0.43 0.06 0.56French Legal Origin (39) 0.31 0.31 0.67 0.59 0.33 0.44 0.05 0.64German Legal Origin (6) 0.00 0.00 0.67 0.83 0.00 0.30 0.00 0.67Scandinavian Legal Origin (5) 0.00 0.00 0.20 0.60 0.20 0.20 0.40 0.80

Mean all countries (105) 0.18 0.17 0.61 0.46 0.25 0.33 0.06 0.62

Common vs. Socialist -3.94a 0.70 -0.84 -3.55a -1.83c -3.47a -0.65 0.18Common vs. French -3.56a -1.94c -0.92 -4.05a -1.86c -3.81a -0.58 -0.46Common vs. German 0.39 0.92 -0.46 -3.81a 1.02 -0.97 0.39 -0.35Common vs. Scandinavian 0.35 0.84 1.54 -2.18b -0.26 0.10 -3.46a -0.90

Panel A: Means


65

Table 12: Correlations Between Outcomes and Indices

IndicesLog ofduration

Judicialefficiency

index

Access tojustice

Enforceabilityof contracts

Corruptionindex

RDRindex

Index ofdefendantprotection

Index ofmandatorydeadlines

Index ofadministrativeprocedures

Debtindexation

Remunerationhourly rate

Panel B: CheckJudicial efficiencyindex

-0.3371 1.0000

Access to justice -0.0052 0.6898a 1.0000


-0.4206 0.8181a 0.7253a 1.0000

Corruption index -0.1831 0.7709a 0.7745a 0.8892a 1.0000

RDR index 0.4164a -0.4481 -0.3165 -0.5790a -0.4361a 1.0000

Index of defendantprotection

0.1186 0.0761 0.0670 0.1585 0.1537 0.0574 1.0000

Index of mandatorydeadlines

0.2164 -0.1969 -0.3323 -0.3708 -0.3585 0.5367a 0.0131 1.0000

Index ofadministrativeprocedures

-0.0204 0.0597 0.1544 0.1168 0.2514 -0.0306 0.0237 -0.0614 1.0000

Debt indexation 0.1248 0.0738 0.1882 0.0707 0.0862 0.1246 0.1106 -0.0049 0.1086 1.0000

Remuneration:hourly rate

-0.1671 0.3890 0.3485 0.4542 0.4632a -0.3137 0.0221 -0.0473 0.0259 0.0186 1.0000

Quota limitsprohibited all cases

-0.1216 0.2779 0.1830 0.1578 0.1814 -0.2194 0.1189 0.0000 -0.0649 0.0620 0.0620

66

TABLE 13A: Check - Outcomes and Indices


Dependentvariables:

LogGNPper

capita

RDRindex

Defendantprotection

Mandatorydeadlines

Administrativeprocedures

Remunerationrate

Quotaprohibited

Debtindexation

Constant N[R2]

Panel B: Check


(0.0489)0.2340a(0.0660)

0.3873(0.3683)

0.1142(0.2894)

-0.1233(0.1648)

-0.1212(0.1646)

-0.1137(0.2162)

0.1343(0.1759)

3.6396a(4496)

105[0.20]


-0.4765b(0.2077)

-0.8621(1.0779)

0.6143(1.1121)

-0.3414(1.0582)

0.1759(0.5179)

0.3957(0.4402)

0.1323(0.5007)

2.3422(1.8131)

54[0.56]


0.0021(0.3438)

-1.2001(1.4744)

-2.4647c(1.3983)

-0.5032(0.9868)

0.8792(0.7965)

0.5541(0.7443)

1.2009c(0.6911)

-7.6179a(1.9922)

75[0.59]


0.7212a(0.0799)

-0.4490a(0.1316)

0.2157(0.5804)

0.0207(0.5899)

-0.4553(0.4753)

0.3122(0.3491)

-0.0162(0.2984)

0.4523c(0.2555)

1.1446(0.8577)

51[0.80]


-0.2131(0.1799)

0.3109(0.8627)

-0.9698(0.7730)

0.6335(0.4482)

1.3125a(0.3271)

0.2739(0.3338)

0.4906(0.3531)

-0.6549(1.1147)

83[0.69]

COURTS - Lex Mundi: The World's Leading Law Firm Network · 2002-06-23 · Comparative law...

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Transcript of COURTS - Lex Mundi: The World's Leading Law Firm Network · 2002-06-23 · Comparative law...