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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


                                    Uri  Weiss*


     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.



     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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