Deterrence, settlement, and litigation under adversarial versus inquisitorial systems

In this paper, we compare deterrence, settlement, and litigation spending under adversarial and inquisitorial systems. We present a basic litigation model with three sequential stages—care, settlement, litigation—and we test the predictions on experimental data. In line with our theoretical expectations, we find that, compared with the adversarial system, the inquisitorial system is associated with lower litigation spending, lower rates of cases settled, and tends to strengthen deterrence.