Why Game Theory could be the key to keeping expensive civil cases out of court

Close up of several people's hands reaching for paper and a phone on a wooden table

Every year, thousands of claimants and defendants in civil law cases fail to settle their disputes out of court. The court cases that follow are often lengthy and expensive. In most instances, both parties end up financially worse off too.

Now research from our Principal Lecturer in Economics, Dr Ansgar Wohlschlegel, suggests Game Theory - the study of situations between people with opposing interests - could settle more of these disputes faster.

And by keeping more civil disputes out of the courtroom, Game Theory could save both litigants and the legal system a lot of money.

Using a model that simulates civil case disputes, Dr Wohlschlegel analyses litigants' incentives when making decisions such as whether to bring suit, to settle out of court, or to appeal a judgment. His research shows that the possibility of a post-trial appeal strongly influences litigants' earlier decisions in a lawsuit.

First, in situations where there is the chance of appeal, the litigant with the stronger case will invest more money and effort to win. That extra investment makes them more likely to succeed in the end too.

I believe game theory can analyse any situation involving strategic conflict

Dr Ansgar Wohlschlegel

Principal Lecturer in Economics

However, when one litigant has an obviously superior case, the possibility of appeal leads to fewer cases being brought. The likelihood of an appeal, even if they win at the initial trial, discourages the litigant with the inferior case from going to court.

But in close-cut cases, the opposite is true. When the odds at trial are more even, both litigants are more determined to fight the case in court. And that means higher costs and expenses for all involved.

By showing how the possibility of an appeal effects civil law cases, Dr Wohlschlegel aims to show government how a change in the law, limiting the appeals process, could reduce the cost of civil cases to the legal system.

'I believe game theory can analyse any situation involving strategic conflict,' he said. 'By analysing people’s opposing interests, we can identify the best strategies in these ‘games’ between them.

'And at a time when the public purse strings are tightening, this research could reduce the high cost of civil cases - to litigants, county courts and the High Court.'