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2019 J. Disp. Resol. 149 (2019)
The Regressive Effect of Legal Uncertainty

handle is hein.journals/jdisres2019 and id is 157 raw text is: The Regressive Effect of Legal Uncertainty Uri Weiss* Abstract Legal uncertainty has a regressive distributive effect. There are sides that gain from increasing legal uncertainty and others that lose from it. Legal uncertainty leads to regressive settlements; a shift from a more certain legal regime to a less certain one transfers wealth from risk-averse parties to risk-neutral parties via the settlements. Thus, because poor people are more risk-averse than rich people, legal uncertainty leads to a transfer of wealth from poor people to rich people. In addi- tion, because women are-or are perceived to be-more risk-averse than men, legal uncertainty leads to a transfer of wealth from women to men. In other words, legal uncertainty has class-regressive and gender-regressive effects. Furthermore, legal uncertainty transfers wealth from parties with weak bargaining power to those with strong bargaining power. It is important to understand the regressive effects of legal uncertainty because the degree of legal uncertainty is not determined by nature; it is a choice by society. THE REGRESSIVE EFFECT OF LEGAL UNCERTAINTY 1. HOW To REDUCE INJUSTICE IN LEGAL NEGOTIATION How can injustice in negotiation be reduced? This question is applicable to legal negotiations, international relations, labor negotiations, and political negotia- tions. Every negotiation has its own particular characteristics. In international re- lations, for example, there is no effective court to enforce the agreement. This paper focuses on the effects of legal uncertainty on legal negotiation. In this first section, we present a broad agenda. Thereafter, we will focus on the regressive effect of legal uncertainty. Our main recommendation is that litigation games with great legal uncertainty should be avoided. * Dr. Uri Weiss, a Polonsky Fellow at Van Leer Institute and a visiting research at the Hebrew University of Jerusalem. Uriw@vanleer. orgil I am grateful for Robert J. Aumann, Ehud Guttel and Omri Yadlin for supervising me in different phases of this continuing project. I thank Irit Haviv-Segal, Joseph Agassi, Kenth Arrow, Barak Atiram, Oren Bar Gill, Eyal Benvenisty, David Gilo, Sharon Hanes, Sergiu Hart, Alon Harel, Daniel Kahneman, Menachem Mautner, Michael Mashler, John F. Nash, Moti Perry, Ariel Porat, Abraham Tabach, and Eyal Winter for our discussions. I also wish to thank the participants in the American Law and Economics Association Meeting, Princeton University (2010); in the 17th International Conference on Game Theory, Stony Brook University (2006); in the Law and Economics Workshop of Tel Aviv University (2005); in the Economic Theory Workshop of The Rationality Center (2006); in the Israeli Law and Economics Conference 2006; in the Game Theory Seminar of The Tech- nion; in the Seventh Corsica Law and Economics Workshop, University of Reims (2006); in Universidad Complutense de Madrid (2006); in the 2005 Thesis Workshop of Tel Aviv University; in The Collage of Management, Departmental Seminar (06/2006) and in the Cooperation Law Seminars and class of Doctor Irit Haviv Segal (2004, 2005).

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