- Concurring Opinions - http://www.concurringopinions.com -
Why Is Privatized Procedure So Rare?
Posted By Dave Hoffman On February 14, 2013 @ 10:33 am In Civil Procedure,Contract Law & Beyond,Empirical Analysis of Law | 4 Comments
For some time, I’ve been mulling  over how closely parties can tailor the rules of civil procedure to their own purposes. That is: can parties write enforceable contract terms which state that if they sue each other, the ordinary procedural rules won’t apply? Do such contracts exist? For example, parties might contract to be able to take 5 depositions in a case instead of the default 10. Or they might dispose of the rules of hearsay. The literature on this topic of private procedure arguably started with the Scott/Triantis piece, Anticipating Litigation in Contract Design , and has gotten new momentum from Bone , Kapeliuk /Klement , Dodge , and Drahozal/Rutledge . My contribution, freshly up on SSRN, ended up being slightly more empirical than I’d expected — though I guess this won’t surprise any of our long-time readers. In Why Is Privatized Procedure So Rare? , I try to explain why there is actually so little private procedure in places we’d expect to see it:
“Increasingly we hear that civil procedure lurks in the shadow of private law. Scholars suggest that the civil rules are mere defaults, applying if the parties fail to contract around them. When judges confront terms modifying court procedures — a trend said to be explosive — they seem all-too-willing to surrender to the inevitable logic of private and efficient private ordering.
How concerned should we be? This Article casts a wide net to find examples of private contracts governing procedure, and finds a decided absence of evidence. I search a large database of agreements entered into by public firms, and a hand-coded set of credit card contracts. In both databases, clauses that craft private procedural rules are rare. This is a surprising finding given recent claims about the prevalence of these clauses, and the economic logic which makes them so compelling.
A developing literature about contract innovation helps to explain this puzzle. Parties are not rationally ignorant of the possibility of privatized procedure, nor are they simply afraid that such terms are unenforceable. Rather, evolution in the market for private procedure, like innovation in contracting generally, is subject to a familiar cycle of product innovation. Further developments in this field will not be linear, uniform and progressive; they will be punctuated, particularized and contingent.”
Article printed from Concurring Opinions: http://www.concurringopinions.com
URL to article: http://www.concurringopinions.com/archives/2013/02/why-is-privatized-procedure-so-rare.html
URLs in this post:
 mulling: http://www.concurringopinions.com/archives/2012/07/party-choice-of-procedure-specific-performance.html
 Anticipating Litigation in Contract Design: http://www.yalelawjournal.org/the-yale-law-journal/article/anticipating-litigation-in-contract-design/
 Bone: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2057987
 Kapeliuk: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1323056
 Klement: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1553107
 Dodge: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1768308
 Drahozal/Rutledge: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1761407&rec=1&srcabs=1768308&alg=1&pos=1
 Why Is Privatized Procedure So Rare?: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2216902
 scrum: http://prawfsblawg.blogs.com/prawfsblawg/2013/02/the-angsting-thread-law-review-edition-spring-2013.html
Copyright © 2010 Concurring Opinions. All rights reserved.