An Economic Approach to the Law of Evidence

Article excerpt

In this article, Judge Richard A. Posner presents the first comprehensive economic analysis of the law of evidence. The article is presented in three parts. First, Judge Posner proposes and describes two possible economic models, both a search and a cost-minimization approach, to describe how evidence is obtained presented, and evaluated In both, he incorporates Bayes' theorem to examine rational decisionmaking. Second he examines the evidence-gathering process, comparing and contrasting, in economic terms, the "inquisitorial" and "adversarial" systems of justice. The inquisitorial system, at first glance, appears to be more economically efficient. This, though, may be illusory, a result of the adversarial system's greater public visibility and widespread acceptance of plea bargaining. Finally, the article addresses burden of proof issues, plus specific provisions of the Federal Rules of Evidence: harmless error, limiting instructions, relevance, character evidence, hearsay, expert witnesses, and various privileges and exclusionary rules, lie concludes that American evidence law, rather than simply sacrificing efficiency in order to protect noneconomic values, is actually quite efficient and possibly superior to its Continental, inquisitorial counterparts; but a number of reforms are suggested.

The law of evidence is the body of roles that determines what, and how, information may be provided to a legal tribunal that must resolve a factual dispute. The importance of the accurate resolution of such disputes to an economically efficient system of law has been discussed at length,(1) but the economic literature dealing with the rules themselves is scanty in relation to the scope and importance of evidence law.(2) This article is the first comprehensive (though it is neither exhaustive nor definitive) economic analysis of that law. It is in three parts. The first part proposes and elaborates an economic model (actually two models, a search model and a cost-minimization model) of evidence. The second part examines the basic structure and structural rules of the evidence-gathering process; it includes an economic comparison between the "inquisitorial" and "adversarial" systems of justice and an analysis of issues relating to burden of proof. The third part is an economic appraisal of salient provisions of the Federal Rules of Evidence, the most influential American codification of such rules; it also takes up some issues of evidentiary privilege and exclusion that the rules do not deal with explicitly.

Like many other economic studies of the legal system, mine concludes that the institutional and doctrinal structure of the American law of evidence has a subtle, though intuitive, implicit, and incomplete economic logic. This conclusion will startle. Most evidence professors, and even a few judges,(3) would, if asked, say that of course the American system of finding facts at trial is inefficient, ludicrously so, and redeemed if at all by the noneconomic values that the system protects. But that assessment is founded on incomplete analysis and on misleading anecdotage that is itself an artifact of a worthwhile feature of the American system--the high degree of public scrutiny that it invites and enables.(4) Neither cheap nor highly accurate, our adversarial system is radically imperfect from the Utopian standpoint so often, though mistakenly, used to evaluate social institutions. Yet even from a perspective concerned only with economic efficiency in the sense of wealth maximization or cost minimization, it may not be inferior to the feasible alternatives, including the Continental inquisitorial system much touted in some quarters of the American legal academy.

I both emphasize the close connection between roles of evidence and the use of the jury and make repeated reference to Bayes' theorem. So let me make clear at the outset that I do not propose that juries or, for that matter, judges be instructed in the elements of Bayesian theory or mathematical probability more generally--or any other theory of probability or evidence. …