Discovery

Discovery

Description

The process by which disputes are resolved varies substantially with and between common law and civil law countries. It should come as no surprise, therefore, to learn that the means by which plaintiffs and defendants obtains and disseminate information also vary widely from country to country. While much of the literature on the economic analysis of legal disputes (reviews in Cooter and Rubinfeld 1989) involves informational issues, relatively little emphasis has been placed on the exchanges of information that occurs after a suit has been filed and before a trial has begun. This essay focuses entirely on pre-trial discovery, with particular emphasis on the US Federal Rules of Civil Procedure. It is important to stress from the outset that the extensive nature of discovery in the US is by no means typical of other common law, or most civil law, legal systems. The extensive variation in discovery practices is no doubt due in substantial part to differences in the legal environments in which discovery operates. These factors include (i) whether the system is adversarial, as in the US, or inquisitorial, as in most European countries; (ii) whether there is substantial reliance on juries as triers of fact, as in the US but not England; (iii) whether there is substantial fee shifting from losing to winning parties, as in the UK and parts of Continental Europe but not in the US; and (iv) whether the underlying culture relies heavily on attorneys, and relies on the court system to encourage the provision of information to resolve disputes, as in the US, but not in Japan. Langbein (1985) has undertaken a comparative analysis of the German and US legal systems, but a more complete comparative analysis awaits further research. Whether the legal system is civil or common law, whether it relies on juries or judges, and whatever the financial incentives the parties face, the lessons that one learns from the study of pre-trial discovery in the US will have broad implications for other common and civil law systems, and vice versa. Ideally, discovery enables each side to become informed about the other’s legal arguments and the facts upon which they are based. Failure to respond fully and candidly to these requests can provoke a variety of sanctions by the court. As a whole, procedural laws are designed to enable each side to discover the other’s legal arguments and the facts upon which they are based, but not to abuse the process while doing so. Discovery in the US has been controversial as it has developed over the past sixty years, from the reforms of the federal rules of evidence in the 1930s through a number of very recent reforms involving mandatory discovery. Cooter and Rubinfeld (1994) summarize the debate concerning the value of discovery and its potential abuse. A reading of the relevant literature suggests that there are five purposes of discovery: (1) to increase the probability of settlement; (2) to increase the fairness and accuracy of settlements; (3) to improve the accuracy of trials; (4) to filter complaints better in order to terminate meritless disputes; and (5) to lower the transaction costs of resolving disputes. The next part of this essay reviews these five uses, while the final section focuses on discovery abuse and some of the policy reforms that have been proposed to eliminate that abuse.

Source Publication

The New Palgrave Dictionary of Economics and the Law

Source Editors/Authors

Peter Newman

Publication Date

1998

Volume Number

1

Discovery

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