Summary Jury Trials: An Alternative Approach to Civil Trials and Their Costs | Study Guides, Projects, Research Law

The

Summary

Jury

Trial

and

Other

Methods

of

Alternative

Dispute

Resolution:

Some

Cautionary

Observations

Richard

A.

Posnert

I

have

been asked

to

discuss

alternatives

to

existing

methods

of

judicial

dispute

resolution.

The great

interest

in

such

alterna-

tives

reflects

the

widespread

sense,

which

I

share,

1

that

our

courts

are

dangerously

overloaded.

I

had

originally

planned

to

discuss

a

variety

of

alternatives,

but

as

I

explored

the literature

2

I

became

fascinated

with

the

summary

jury trial,

and

realized

it

was

a

sub-

ject

worthy

of

an

entire paper.

But

much of

what

I shall

say

about

the

summary

jury trial

applies

to other alternatives

as

well,

so

that

the

paper

is

not

quite

so

narrow

as

it

may

seem;

and

Part

III

dis-

cusses

two

of

those

alternatives.

I.

CRITERIA

FOR EVALUATION

The criteria

for

evaluating

proposed

alternatives

to

the

con-

ventional methods

of

resolving

legal

disputes

are

mostly

taken

for

t

Judge,

U.S.

Court

of

Appeals

for

the

Seventh

Circuit;

Senior

Lecturer,

The

Univer-

sity

of

Chicago

Law School.

This

is

a

revised version

of

a paper

given

at

the

National

Con-

ference

on

Litigation

Management

at

Yale

Law School

on

October

4,

1985.

The

research

assistance

of

Randal

C.

Picker

is

gratefully

acknowledged,

as

are

the

comments

of

Picker,

Albert

Alschuler,

Gregory

Barton,

Hugh

Brenneman,

Edward

Brunet,

Frank

Easterbrook,

E.

Donald

Elliott, Jerry

Goldman,

William

Landes,

John

Langbein,

Geoffrey

Miller,

Phil

Neal,

Anthony

Partridge,

Maurice

Rosenberg,

and

Hans

Zeisel

on

a

of

this

paper;

discussions

of

the

subject-matter

of

the

paper

with

Susan Getzendanner

and

Thomas

Lambros;

and

comments

of

conference

participants.

1

See

RICHARD

A.

POSNER,

THE

FEDERAL

COURTS:

CRISIS

AND

REFORM

pt.

11

(1985).

See,

e.g.,

ELIZABETH

ROLPH,

INTRODUCING

COURT-ANNEXED

ARBITRATION:

A

POLI-

CYMAKER'S

GUIDE

(Rand

Inst.

for

Civ.

Justice

1984);

ALTERNATIVES

TO

THE

HIGH

COST

OF

LITIGATION,

Special

Issue

on

Judicial

ADR,

1985,

passim

(Center

for

Public

Resources

publi-

cation);

ATTACKING

LITIGATION

COSTS

AND

DELAY:

PROJECT

REPORTS

AND

RESEARCH FINDINGS

(Am.

Bar

Ass'n

1984);

Symposium:

Alternative

Dispute

Resolution,

29

VILL.

L.

REV.

1219

(1984);

Bush,

Dispute

Resolution

Alternatives

and

the

Goals

of

Civil

Justice:

Jurisdic-

tional Principles

for

Process

Choice,

1984

WIs.

L.

REv.

893;

McMillan

&

Siegel,

Creating

a

Fast-Track

Alternative

Under

the

Federal

Rules of

Civil

Procedure,

60

NOTRE

DAME

L.

REV.

431

(1985);

Nejelski

&

Zeldin,

Court-Annexed

Arbitration

in

the

Federal

Courts:

The

Philadelphia

Story,

42

MD.

L.

REV.

787

(1983);

Peckham,

A

Judicial

Response

to

the

Costs

of

Litigation:

Case

Management,

Two-Stage Discovery

Planning

and

Alternative

Dispute

Resolution,

37

RUTGERS

L.

REV.

253

(1985).

HeinOnline -- 53 U. Chi. L. Rev. 366 1986

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The Summary Jury Trial and Other

Methods of Alternative Dispute Resolution:

Some Cautionary Observations

PP is the probability of the plaintiff's victory as the plaintiff per-

ceives it; P the probability of the plaintiff's victory as the defend-

ant perceives it; J the judgment for the plaintiff if he wins; C the

cost of trial (assumed to be the same for both parties); and S the

cost of settlement (also assumed to be the same for both parties).

The left side of inequality (1) is the plaintiff's minimum demand;

the right side is the defendant's maximum offer."

Admittedly the model is oversimplified. For example, it as-

sumes that the parties' litigation and settlement costs are the

same, that there are only two possible outcomes, J and judgment

for defendant (i.e., J and zero), and that the parties agree on the

value of J, though they may disagree about the probability that

the plaintiff will win. But the complications one might introduce to

make the model more realistic would not greatly affect the use I

shall make of it; I shall illustrate this point in a moment.

Since we can assume that a trial costs more than a settlement,

the value of P, - Pd, the parenthetical term on the left side of

inequality (2), is critical. If both parties are pessimistic, the paren-

thetical will be negative and the case will be settled. If, for exam-

ple, the plaintiff thought he had only a .4 chance of winning but

the defendant thought the plaintiff had a .7 chance of winning,

both parties would want to settle because both would expect to

lose if the case went to trial. Trial is more likely in the class of

cases where both parties are optimistic, as where the plaintiff

thinks he has a .9 chance of winning and the defendant thinks the

plaintiff has only a .3 chance of winning. For example, given these

probabilities, and assuming J=$10,000, C=$2,000, and S=$500,

the parties will litigate, since the plaintiff's minimum settlement

price, $7,500, exceeds the defendant's maximum settlement offer,

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