The duration of personal injury litigation

Date06 September 2000
Published date06 September 2000
AuthorStephen J Spurr
Stephen J. Spurr
This paper examines and tests the implications of the court congestion
hypothesis of Posner (1972) and Priest (1989). This hypothesis suggests
that the effects of delay reduction programs may be largely or completely
offset by a resulting increase in demand for litigation. We also analyze the
effect on the pace of litigation of certain factors not explicitly considered
by the Posner-Priest model.
We find that a delay reduction program was successful in reducing the
time to settlement, and the time to verdict for tried cases, over the period
covered by the data. As for behavioral responses, there is no evidence of
an increase in the trial rate; there is, however, strong evidence of an
increase in the number of cases filed annually in the court in question.
Other results are consistent with the model's predictions about the effects
of the prejudgment rate of interest.
These days it is increasingly difficult to find areas of legal research untouched
by economic analysis. The problem of court delay is no exception to this
generalization. The application of the economic approach by Posner (1972) and
Priest (1989) has enriched the literature of this subject by providing a new set
of issues to be considered and new hypotheses to be tested. Their analysis of
court congestion suggests that the effects of delay reduction programs may be
Research in Law and Economics, Volume 19, pages 223-246.
Copyright © 2000 by JAI/Eisevier Inc.
All rights of reproduction in any form reserved.
ISBN: 0-7623-0308-5
only transitory, since initial improvements may be swamped by an offsetting
increase in demand for litigation.
This paper has two objectives. One is to examine and test the implications of
the court congestion hypothesis of Posner and Priest. The other objective
(required in order to achieve the first) is to analyze the factors that determine
the duration of litigation. We first review the model developed formally by
Priest, which concerns the choice the parties make between settling the case
and going to trial. The theory has implications for the effect of certain
variables, such as the expected time to trial and the rate of pre-judgment
interest. We consider how an increase in demand for litigation would be
reflected on various intensive and extensive margins. We then analyze the
determinants of duration with two data sets, one from Michigan and the other
from New York.
We have used two new data sets to test the court congestion hypothesis and to
investigate the factors which affect the duration of litigation. These data sets are
complementary, in that each one has variables relevant to duration not available
in the other one. The first data set has 7,270 medical malpractice claims filed
in Michigan, almost all of which were closed between 1978 and 1990. This
data set is of interest because of concerns about delay in medical malpractice
cases, which have prompted procedural reforms aimed specifically at this type
of litigation. In Illinois, for example, a special trial division was created to
enable certain judges of the Cook County Circuit Court to specialize in
handling medical malpractice litigation. 1
The second data set has 113,965 claims for personal injuries or wrongful
death filed in various courts in the First Judicial Department of New York
(Manhattan and the Bronx) during the period from 1974 through 1984. This
data set includes variables that are rarely available, indicating how the attorney
obtained the case, and whether the case was referred by one attorney to another
under an arrangement whereby the contingent legal fee is divided between the
attorneys. Any lawyer who receives a referral from another lawyer under these
circumstances is sure to be a specialist in personal injury litigation.
Forty-five per cent of the claims in the Michigan data set were filed in Wayne
County, which accounted for about 25% of the state's population in 1980. 2

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT