This essay explores settlement dynamics under three different burden of proof rules. The conventional burden of proof is a discontinuous step-function, jumping from no damages to full damages at the 0.5 jury confidence level. Continuous burdens of proof, by contrast, would permit sanctions to steadily increase as juror confidence rises from 0 to 1, with no discontinuity. Linear burdens, which have received extensive attention in prior literature, escalate sanctions steadily across the whole range of confidence levels, while the logistic burden takes a non-linear form.
Using a data simulation approach guided by the empirical realities of American civil litigation, I consider the incentives that each of these rules create for parties contemplating settlement, and conclude that a linear continuous burden would likely raise our settlement rate by a modest amount, except in very large cases and in ‘easy’ cases, in which an unbiased person would predict that a trial fact-finder would have a level of confidence in liability quite close to either zero or one. I also compare the expected error rate of the settlements that each rule produces, and find that linear rule modestly lowers the expected error rate of settlement overall, although this benefit does not hold for easy cases or those with very high damages. Lastly, I conduct a similar analysis for the logistic burden, finding that it induces a similar quality and quantity of settlements as we currently achieve using conventional burdens.
Spottswood, Mark, Proof Discontinuities and Civil Settlements (April 26, 2020). Theoretical Inquiries in Law (forthcoming 2020).