Paper of the Day: Transnational Litigation as a Prisoner’s Dilemma

The paper of the day is Transnational Litigation as a Prisoner’s Dilemma, by Maya Steinitz and my law school classmate Paul Gowder. The paper has just been published in the North Carolina Law Review, but an earlier version is available on SSRN.

The thesis of the paper is that in a transnational case before a “corruptible court,” the parties find themselves in a prisoner’s dilemma. Each would prefer that both would litigate honestly, but the risk of being honest when your adversary acts corruptly leads both to be dishonest in the first instance. That’s a very colloquial way to put it, of course. I could be all, “let a and b be the two litigants, and let Pa and Pb be the expected value to a and b, respectively, of acting honestly, and let Qa …” But I am not going to do to you what was done to me when I, an unsuspecting political theory student, arrived in a graduate political theory program. If you want to know more about the prisoner’s dilemma, Wikipedia has a basic introduction.

Anyway, I think this paper is illuminating because it lays bare some of the economic incentives, and there’s no gainsaying the incentives. But I don’t know that this is a useful way to think about things. I can construct lots of scenarios where the economic incentives favor dishonest litigation tactics. A defense lawyer has an incentive to fail to turn over a damning document in discovery. The cost of detection and punishment may be very low; the benefit for the client is very high. A plaintiff’s lawyer has an incentive to bring a false claim of childhood sexual abuse. The chance the client can be proved to be lying may be very low; the potential benefit is high. But lawyers’ behaviors are shaped by norms as well as by incentives. This is not something I have studied empirically, but my strong suspicion is that in a reasonable legal system the norms are very strong. So if we are talking about American lawyers litigating abroad, as in the Chevron/Ecuador case, which the article discusses at length, then we want to say that the lawyers are going to follow the law regardless of the incentives. And if they don’t, it’s not just because of the incentives. In other words, for lawyers socialized in a reasonable legal culture, I’m not sure there is much reason to think that the incentives will overpower the norms.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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