Do judges react to the probability of appellate review? Empirical evidence from trial court procedures

ABSTRACT

The appellate review system is intended to serve as an efficient remedy for imperfect judicial decision making. However, it can fulfil this task only when appeals are ex ante unpredictable to the judge, and thus can be expected to occur primarily in case of a bad verdict. Using data from case records of a German trial court, we show that the probability of appeal can be predicted based on easily observable exogenous factors. Controlling for the complexity of a legal case, we find that judges also tend to decrease their effort when the ex ante probability of appeal is low. Thus, our empirical evidence indicates an inefficiency in the appellate review system because trial judges allocate their effort to cases not exclusively according to case complexity, but particularly according to the ex ante probability of being reviewed.

KEYWORDS:

• Litigation
• judicial behaviour
• appellate review
• civil procedure

JEL CLASSIFICATION:

• K10
• K41
• D82

Notes

¹ Because file records are transferred to the higher instance courts throughout the appeal but return to the initial court after a final decision, we used the sample year for which the court’s file records are most complete.

² When including FACTS as an additional explanatory variable to control for the case complexity, the estimated coefficient becomes insignificant. However, the remaining results remain qualitatively unaffected.

³ The results remain robust when we exclude the appealed cases that were withdrawn or settled prior to the appellate court´s decision.

⁴ We report marginal effects for a case decided by a male judge in contract law where the defendant was not supported by an advocate. Furthermore, we assumed 86.8 pages of correspondence, which is the average number of pages.

⁵ The reported results are qualitatively similar when the field of law is used as an additional control variable in the regression equation.