Analysis of conflict resolution: application to French civil law.

Summary The economic analysis of dispute resolution focuses on the microeconomic behavior of litigants. Since settlement is less costly than trial, the choice of judgment is explained by the parties' excessive optimism about their chances of winning at trial and by the information asymmetries that encourage the parties to behave strategically. In the optimistic stream, the agreement is reached if there is a negotiation interval. In the strategic stream, filtering and signaling models determine the probability of settlement and its amount, under incomplete information. A dynamic approach makes it possible to predict the moment of its achievement and highlights a last limit effect whose presence is empirically confirmed in French civil courts. Once the variables influencing the outcome of the dispute have been identified and the state of the art of French civil justice has been established, policies to regulate the demand for justice are considered, the objective being to minimize the social cost of disputes. These policies are first focused on the costs of litigation. A positive analysis shows that an increase in trial costs reduces the frequency of judgments, but that its impact is limited by legal aid, the aim of which is to facilitate access to the courts for the poorest. A policy of reallocating trial costs between parties is then considered through a comparison of the incentives to sue and negotiate under the American, English and French cost award rules. The role of lawyers in obtaining settlements is also studied, with emphasis on their own particularities (reputation, altruism) but also on the type of fees that are most favorable to settlements (result-based fees, time-based fees, fixed fees). Finally, a study of alternative dispute resolution methods is proposed. It establishes the conditions under which litigants prefer mediation to simple negotiation and arbitration to judgment. It then looks at the practice of arbitration by specifying the determining variables of the arbitration award and by comparing the adversarial and inquisitorial procedures in order to identify the one that minimizes the risks of error for the arbitrator.