1. Law and Economics-Charles W. Upton The Litigation Process

2. Our Objectives We want Bill to pay the right amount. –That way, Bill has the right incentives not to harm Jim

3. The Litigation Process Our Objectives We want Bill to pay the right amount. We want to minimize the actual values of Y Bill and Y Jim.

4. The Litigation Process Our Objectives We want Bill to pay the right amount. We want to minimize the actual values of Y Bill and Y Jim. That means minimizing differences in expectations.

5. The Litigation Process Our Objectives We want Bill to pay the right amount. We want to minimize the actual values of Y Bill and Y Jim. That means minimizing differences in expectations. We design a sequential trial process to provide information.

6. The Litigation Process Time

7. The Litigation Process Time This process will eliminate trials

8. The Litigation Process The Process Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

9. The Litigation Process The Process (1) Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

10. The Litigation Process The Process (2) Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

11. The Litigation Process The Process (3) Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

12. The Litigation Process The Process (4) Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

13. The Litigation Process The Process (5) Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

14. The Litigation Process The Process (6) Jim, injured, decides whether to sue Settle or begin Discovery? Bargains Q S S Goes to Trial W Appeal? Q Appeals W L

15. The Litigation Process End ©2004 Charles W. Upton