Mühl, Manuela; Vereeck, Lode --- "Harmonization of judicial interest payments and litigation in a federalist state" [2003] ELECD 70; in Marciano, Alain; Josselin, Jean-Michel (eds), "From Economic to Legal Competition" (Edward Elgar Publishing, 2003)

Book Title: From Economic to Legal Competition

Editor(s): Marciano, Alain; Josselin, Jean-Michel

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760061

Section: Chapter 6

Section Title: Harmonization of judicial interest payments and litigation in a federalist state

Author(s): Mühl, Manuela; Vereeck, Lode

Number of pages: 22

Extract:

6. Harmonization of judicial interest
payments and litigation in a federalist
state
Manuela Mühl and Lode Vereeck

INTRODUCTION
Justice is not served unless it is rendered swiftly. Delay is therefore a problem
that clearly undermines the functioning of the court system and may even
threaten its very existence. In a recent article,162 an extended Shavellian
(1982) model clearly demonstrated how court delay negatively affects social
welfare. Court delay is not only unjust and unlawful,163 it is also inefficient.
Since Gravelle (1990) observed that the time-elasticities of the demand for
trials from plaintiffs and defendants are negatively correlated, conventional
supply-side policies to reduce delay are considered inadequate. Rationing
trials by court fees is then the only alternative left. Judicial interest payments
are meant to compensate litigants for waiting and the depreciation of their
stakes. But what is the impact of such awards on the level of litigation?
With the European Community came free intra-European trade and move-
ment of persons, yet also more conflicts between parties of different nationali-
ties. If a federalist constitution permits mobility of litigants, post-conflict
resolution opportunities might be described in terms of Tiebout competition
between different court systems. This appears to be the case since litigants have
some freedom in choosing the place of court (e.g. the residence of the plaintiff
or defendant or the place of accident or failed transaction). Unintended compe-
tition between national court systems will be the result and can take many
forms. Timely ...