WEBVTT NOTE The Vanishing Trial: A Hayekian Perspective 1 00:00:00.000 --> 00:00:03.600 I'm going to be discussing the Vanishing Trial from a Hayekian perspective. 2 00:00:03.600 --> 00:00:08.360 I'm assuming that most people in this room understand the very basics of Hayek's Theory 3 00:00:08.360 --> 00:00:11.520 and the law, so I'm not going to spend too much time discussing that other than using 4 00:00:11.520 --> 00:00:15.720 it as a critique for the other versions. 5 00:00:15.720 --> 00:00:17.840 So this is what the Vanishing Trial says. 6 00:00:17.840 --> 00:00:21.520 We went from here for trials to here for trials. 7 00:00:21.520 --> 00:00:26.720 They have found this in not only what we have here is civil trials in the circuit, I'm sorry, 8 00:00:26.720 --> 00:00:29.720 in district courts, but also in appeals courts. 9 00:00:29.720 --> 00:00:36.520 It went from 11.5% in 1968 to 1.5% in 2002. 10 00:00:36.520 --> 00:00:39.760 So that's an enormous drop in trials. 11 00:00:39.760 --> 00:00:42.280 So what happened first is that this guy, Paul Galanter, 12 00:00:42.280 --> 00:00:44.520 from University of Wisconsin writes a paper, 13 00:00:44.520 --> 00:00:49.440 is 111 pages, contains something like 50 or 60 pages 14 00:00:49.440 --> 00:00:51.400 of just charts and numbers. 15 00:00:51.400 --> 00:00:53.080 So nobody reads it, right? 16 00:00:53.080 --> 00:00:56.360 Because it's a 111-page law review article. 17 00:00:56.360 --> 00:00:59.800 And this won't move on, so I can't, there we go. 18 00:00:59.800 --> 00:01:03.240 So what are the fears from this, right? 19 00:01:03.240 --> 00:01:05.640 The fears from these, from the drop-in trials 20 00:01:05.640 --> 00:01:07.040 that the law will cease to develop. 21 00:01:10.120 --> 00:01:13.280 Owen Fiss from Yale says the other problem we're going to have 22 00:01:13.280 --> 00:01:14.280 is coercion. 23 00:01:14.280 --> 00:01:17.400 And this one is still confusing to me. 24 00:01:17.400 --> 00:01:18.800 He says that what's going to happen 25 00:01:18.800 --> 00:01:21.680 is we're going to see parties basically 26 00:01:21.680 --> 00:01:26.280 bullied into accepting negotiated outcomes they wouldn't 27 00:01:26.280 --> 00:01:27.660 Under Normal Circumstances. 28 00:01:27.660 --> 00:01:30.620 So if one party is very wealthy and the other party 29 00:01:30.620 --> 00:01:32.580 is very impoverished, the wealthy party 30 00:01:32.580 --> 00:01:36.020 will just basically bully the impoverished party 31 00:01:36.020 --> 00:01:39.300 into accepting a deal that's not in their best interest. 32 00:01:39.300 --> 00:01:41.420 This has been widely criticized, mainly 33 00:01:41.420 --> 00:01:44.980 because that rich person can afford a much better attorney 34 00:01:44.980 --> 00:01:46.580 than the impoverished person as well. 35 00:01:46.580 --> 00:01:49.540 So it's really unclear as to what the judicial system would 36 00:01:49.540 --> 00:01:53.700 be any better for the impoverished person. 37 00:01:53.700 --> 00:02:00.700 The next fear here is that this whole movement catches steam when a three-page article comes 38 00:02:00.700 --> 00:02:06.140 out in the American Bar Association litigation journal. I think I would be remiss not to 39 00:02:06.140 --> 00:02:11.420 mention that the litigation journal is arguing for more trials. That probably shouldn't surprise 40 00:02:11.420 --> 00:02:14.480 a whole lot of people. 41 00:02:14.480 --> 00:02:18.240 So here's the first theory that comes out. This is from Ms. Rifo. She's the one that 42 00:02:18.240 --> 00:02:21.040 by the ABA Journal. 43 00:02:21.040 --> 00:02:22.920 We have a dispute, and we can all 44 00:02:22.920 --> 00:02:24.720 agree that the dispute occurs. 45 00:02:24.720 --> 00:02:26.600 Then we go to trial through the ruling. 46 00:02:26.600 --> 00:02:28.800 This is important because it creates the law 47 00:02:28.800 --> 00:02:30.160 through stare decisis. 48 00:02:30.160 --> 00:02:33.600 So every time a trial occurs, a judgment 49 00:02:33.600 --> 00:02:38.040 is rendered from those judgments the law is created, 50 00:02:38.040 --> 00:02:40.120 and that is how society knows how to behave. 51 00:02:40.120 --> 00:02:49.920 I'm sorry, this is widely, lawyers run for the hills from this. Even those that support 52 00:02:49.920 --> 00:02:54.700 the Vanishing Trial think that this is complete nonsense because at the end of the day we 53 00:02:54.700 --> 00:03:01.720 all know that just because something is ruled on doesn't make it so it's going to be followed. 54 00:03:01.720 --> 00:03:05.600 And Paul Galanter, the guy I mentioned initially, he comes out and says, no, no, no, that's 55 00:03:05.600 --> 00:03:11.000 That's not what I meant at all. You confused what I was saying. What I meant is legal pluralism. 56 00:03:11.000 --> 00:03:15.800 So what's legal pluralism? Legal pluralism is that courts provide signals through language 57 00:03:15.800 --> 00:03:20.880 and pretrial motions. So the courts are going to start to say, hey, your side's going to 58 00:03:20.880 --> 00:03:26.720 lose here. I would settle. And then they will settle. So it's not that these disputes are 59 00:03:26.720 --> 00:03:30.120 not getting heard by the courts. They're just not going through to trial. And there's some 60 00:03:30.120 --> 00:03:38.720 Some evidence of this. The percentage of decisions through trials has certainly decreased substantially, 61 00:03:38.720 --> 00:03:45.720 but the number of lawsuits filed has dramatically increased. So at the end of the day, this 62 00:03:45.720 --> 00:03:52.520 has some evidence for it. This is called litigation. So yeah, we're all going to go through the 63 00:03:52.520 --> 00:03:57.680 motions like we're going to trial, but nobody really believes they're going to go to trial 64 00:03:57.680 --> 00:04:02.680 I mean, very small percentage of cases. 65 00:04:02.680 --> 00:04:05.920 This is also called negotiating in the shadow of the courthouse. 66 00:04:05.920 --> 00:04:11.760 The courthouse is setting what the negotiation terms will be, and so it's not really clear 67 00:04:11.760 --> 00:04:14.000 how much the trial is really important anymore. 68 00:04:14.000 --> 00:04:20.820 They also, the other big criticism from the legal pluralism school is that the vanishing 69 00:04:20.820 --> 00:04:24.640 trial in the ABA sense painted way too broad of a stroke. 70 00:04:24.640 --> 00:04:28.740 We see certain regions of the country still having a great deal of trials. 71 00:04:28.740 --> 00:04:35.560 We see a lot of prisoner petitions still taking place. 72 00:04:35.560 --> 00:04:38.900 So they painted this whole thing as way too broad of a stroke. 73 00:04:38.900 --> 00:04:40.020 So what do they say happens? 74 00:04:40.020 --> 00:04:41.500 They say, listen, there's two things. 75 00:04:41.500 --> 00:04:44.780 First, we both agree again that there's a dispute here. 76 00:04:44.780 --> 00:04:49.160 And from this, the laws can be decided in some ways through venue choice, right? 77 00:04:49.160 --> 00:04:52.260 So more free market approach in some very odd ways. 78 00:04:52.260 --> 00:04:56.820 So instead of going through to trial, where I kind of take my risk, if I'm going to win 79 00:04:56.820 --> 00:05:02.300 or lose, but there will be a winner and a loser, maybe we can both find some ways to 80 00:05:02.300 --> 00:05:03.300 win. 81 00:05:03.300 --> 00:05:07.820 So if I wreck your car and I say, hey, you know, I'm sorry about that, and you say, oh, 82 00:05:07.820 --> 00:05:12.500 that car, my mother gave that car to me, that car is very sentimentally valuable, I want 83 00:05:12.500 --> 00:05:19.260 $100 million for it, that car meant a heck of a lot to me, well, wait a minute now, that 84 00:05:19.260 --> 00:05:24.700 $5,000 worth, you know, would you take $5,000? No, no, no, no, no. 85 00:05:24.700 --> 00:05:28.700 So maybe we can reach an agreement and that says that perhaps car disputes don't need 86 00:05:28.700 --> 00:05:36.300 to go through the courts as often. And here's the big, big addition that I don't think has 87 00:05:36.300 --> 00:05:44.580 gotten enough attention. Spontaneous order, which is SO in my presentation, continues 88 00:05:44.580 --> 00:05:53.540 used through the ADR process. The law does not cease to develop exclusively because there's 89 00:05:53.540 --> 00:06:03.260 no stare decisis. That's very Hayekian and very correct. I should surprise nobody here. 90 00:06:03.260 --> 00:06:10.140 So this led me to think that this is all very good, but I think there's something more here. 91 00:06:10.140 --> 00:06:13.960 Hayek believesivides a spontaneous law, a spontaneous order creates a law. The law is created through 92 00:06:13.960 --> 00:06:22.960 Heed says that societal norms and expectations will always be what we decide by law. 93 00:06:22.960 --> 00:06:28.960 He says this is certainly not true for legislation. 94 00:06:28.960 --> 00:06:31.960 There's a very clear divide here. 95 00:06:31.960 --> 00:06:34.960 Law is done through spontaneous order. 96 00:06:34.960 --> 00:06:36.960 It will protect societal expectations. 97 00:06:36.960 --> 00:06:38.960 Legislation might not. 98 00:06:38.960 --> 00:06:56.960 Okay? And a judicious decision can be legislation in the Hayekian sense, in that if it goes against what we can consider our societal expectations, it is not the law, even though it's been ruled on by a court, rather it's become legislation. 99 00:06:56.960 --> 00:07:03.800 He also says that law is likely at its best when it's not written. 100 00:07:03.800 --> 00:07:09.400 When you put something in words, what we have known intuitively, problems will arise. 101 00:07:09.400 --> 00:07:11.360 So let's use a very good example. 102 00:07:11.360 --> 00:07:14.800 I noticed something incredibly odd at this conference so far. 103 00:07:14.800 --> 00:07:18.300 When they always ask for questions, you guys raise your hands. 104 00:07:18.300 --> 00:07:21.520 And I read Mises.org pretty close to every day, and I've never seen that rule written 105 00:07:21.520 --> 00:07:26.580 down anywhere, that for questions we expect you to raise your hand. 106 00:07:26.580 --> 00:07:30.580 Now, let's say we say, okay, that's fine. I'll write it down. When you have a question, you raise your hand. 107 00:07:30.580 --> 00:07:34.580 Well, now let's say we're in a classroom with a test and I don't know one of the answers. 108 00:07:34.580 --> 00:07:38.580 I raise my hand and say, I don't know the answer to this question on the test. 109 00:07:38.580 --> 00:07:42.580 Well, no, that's not what we meant. Now we have to have an exception to the rule. 110 00:07:42.580 --> 00:07:46.580 And we can see how this continues indefinitely. Now there's exceptions to the exceptions, 111 00:07:46.580 --> 00:07:50.580 and it creates a whole big problem. 112 00:07:50.580 --> 00:07:54.580 So law is at its best when it's something we know intuitively, 113 00:07:54.580 --> 00:08:06.580 Something that society decides as a whole and is also transmitted through imitation, normally. 114 00:08:06.580 --> 00:08:13.580 I would likely guess that none of us ever was told to raise your hands when you have a question. 115 00:08:13.580 --> 00:08:17.580 We saw it in the movies. Maybe we saw our parents do it. 116 00:08:17.580 --> 00:08:22.580 Maybe we came to a conference like this and saw others doing it and we figured it out. 117 00:08:22.580 --> 00:08:30.660 It's passed on through imitation, not the written word. 118 00:08:30.660 --> 00:08:37.020 Once again, normally, so I put a caveat on that one. 119 00:08:37.020 --> 00:08:42.900 Here is the most important part, in my view, of the Hayekian theory. 120 00:08:42.900 --> 00:08:48.420 Laws change endogenously, meaning from within the system. 121 00:08:48.420 --> 00:08:55.020 There is nobody that comes from above and says your new societal expectations are X. 122 00:08:55.020 --> 00:08:56.940 They can't do that. 123 00:08:56.940 --> 00:09:04.620 We all as a group decide this through spontaneous order. 124 00:09:04.620 --> 00:09:10.740 The other big limitation on what Hayek says the judge can do is that he must work his 125 00:09:10.740 --> 00:09:19.580 is rule into a framework of already decided expectations, okay? 126 00:09:19.580 --> 00:09:25.220 So if we already, you know, so it's very rare to have a brand new case come before the court. 127 00:09:25.220 --> 00:09:28.320 It's likely to be decided a thousand times before. 128 00:09:28.320 --> 00:09:33.100 If you, you're going to have to work your theory, that law, that rule, into the general 129 00:09:33.100 --> 00:09:39.060 framework of all the other laws and rules. 130 00:09:39.060 --> 00:09:41.580 And this is why. 131 00:09:41.580 --> 00:09:48.660 Legislation can be nullified through the trial, and I would argue also through the ADR system. 132 00:09:48.660 --> 00:09:56.340 If a law is created, either through legislation as we know it, or through a judge deciding 133 00:09:56.340 --> 00:10:00.260 something that's against societal expectations, it will be nullified through the judicial 134 00:10:00.260 --> 00:10:01.260 system. 135 00:10:01.260 --> 00:10:02.660 It won't be enforced. 136 00:10:02.660 --> 00:10:05.900 I can prove this very, very easily. 137 00:10:05.900 --> 00:10:10.580 I'm assuming all of you drove to some way, either to the airport or to Mises. 138 00:10:10.580 --> 00:10:15.340 Raise your hand if you didn't speed. Raise your hand if you went exactly the speed limit 139 00:10:15.340 --> 00:10:21.060 or below the entire way. Oh, you guys are lying, whoever rose their hands. I will call 140 00:10:21.060 --> 00:10:25.540 all of you out, whoever rose their hands. Well, of course you sped, and I'll give you 141 00:10:25.540 --> 00:10:31.980 a little hint. The speed limit around here was 70. I went 73 in front of a cop. He didn't 142 00:10:31.980 --> 00:10:37.980 Hayek pulled me over. Why? Because the law says I'm allowed to speed. It's not written down. 143 00:10:37.980 --> 00:10:46.980 But if he pulled me over for going 71 miles per hour, I'd think he's crazy. And I would take it to court and I would bet that Jerry would find a way to make me win. 144 00:10:46.980 --> 00:10:53.980 I would argue, hey, it's more safe this way. If I go the speed limit and nobody else does, I can cause an accident. There could be problems. 145 00:10:53.980 --> 00:10:59.980 I'll say there's mitigating circumstances. And I'll bet you dollars to doughnuts, I walk. 146 00:10:59.980 --> 00:11:06.980 And Hayek says, that's beautiful. That is the law. The law says the speed limit's not 70. 147 00:11:06.980 --> 00:11:11.980 The speed limit is some number above 70. That's wonderful. 148 00:11:11.980 --> 00:11:19.980 Now, if I got pulled over for going 120, which I haven't done, my car would fall apart, 149 00:11:19.980 --> 00:11:25.980 then I would certainly get pulled over, and I'll bet you that Jerry looks at me a little bit differently, right? 150 00:11:25.980 --> 00:11:28.980 Because now I'm not following a law. 151 00:11:31.980 --> 00:11:34.980 Here's the big, big takeaway. 152 00:11:34.980 --> 00:11:37.980 I know I've bored you guys plenty already. 153 00:11:37.980 --> 00:11:43.980 Society creates their norms and expectations through spontaneous order. 154 00:11:43.980 --> 00:11:48.980 Those laws are created before the dispute. 155 00:11:48.980 --> 00:11:57.980 The Vanishing Trial is looking at how law develops too late in the process. 156 00:11:57.980 --> 00:12:02.980 And this makes inherent sense, I will argue. 157 00:12:02.980 --> 00:12:09.980 How the average dispute occurs because I have wronged you or you have wronged me. 158 00:12:09.980 --> 00:12:18.980 What do we mean by wronged? I mean, you have violated my societal expectations. You have done something that society says you cannot do to me that is actionable. 159 00:12:18.980 --> 00:12:25.980 If the laws only decided after the trial, I'll have no way to know that you wronged me. 160 00:12:25.980 --> 00:12:36.980 The rule must be created before the dispute. If not, the system as a whole makes no sense. 161 00:12:39.980 --> 00:12:50.980 And so this also leads to the thought that, hey, Hayek says that rules are discovered, not created. 162 00:12:50.980 --> 00:12:58.980 Well, if the rules are truly discovered, it doesn't matter which party discovers them. 163 00:12:58.980 --> 00:13:05.980 If the rules are really obvious to society, that same rule should be discovered through either ADR, 164 00:13:05.980 --> 00:13:11.980 Alternative Dispute Resolution, I'm sorry, or through the trial system. 165 00:13:11.980 --> 00:13:24.220 It shouldn't matter which system the participants choose because the same rule will be discovered. 166 00:13:24.220 --> 00:13:29.740 So here's what I think, you know, Hayek is far more brilliant than I could ever dream 167 00:13:29.740 --> 00:13:34.740 of being, so I couldn't, you know, he could be laughing at me up there and I won't know. 168 00:13:34.740 --> 00:13:37.180 But here's the big things on trial center, right? 169 00:13:37.180 --> 00:13:41.260 So these laws are created before the dispute occurs. 170 00:13:41.260 --> 00:13:45.900 And stare decisis means very little if not in accordance with societal expectations. 171 00:13:45.900 --> 00:13:50.220 My paper last year discussed Hayek and the civil law. 172 00:13:50.220 --> 00:13:55.340 And I showed, I think somewhat convincingly, that even in civil law countries where the 173 00:13:55.340 --> 00:14:01.540 legislature supposedly writes the rules, supposedly says exactly what the law is, how it should 174 00:14:01.540 --> 00:14:04.660 be enforced and what is to occur. 175 00:14:04.660 --> 00:14:07.540 Even there, societal expectations were more important 176 00:14:07.540 --> 00:14:10.700 than what the legislature said. 177 00:14:10.700 --> 00:14:17.260 The courts found a way around it to meet societal expectations. 178 00:14:17.260 --> 00:14:19.260 And then he would also question, why would we 179 00:14:19.260 --> 00:14:24.300 assume that the law can only develop through trials? 180 00:14:24.300 --> 00:14:28.580 That seems like an absolutely absurd assumption. 181 00:14:28.580 --> 00:14:31.300 Here's what I think he would say on legal pluralism. 182 00:14:31.300 --> 00:14:35.140 Still, laws are created before you say they are. 183 00:14:35.140 --> 00:14:38.620 Then he would say, yeah, consumer choice is good, like that's, yeah, good. 184 00:14:38.620 --> 00:14:45.900 Then he would say that they understand how law can develop through ADR. So I think he'd be a lot more positive on legal pluralism. 185 00:14:45.900 --> 00:14:51.820 I think he'd still say there's some problems in the underlying theory of when law is created, but that's pretty good. 186 00:14:51.820 --> 00:14:59.740 So lastly, I'm going to look at what's gained. So let's say these fear mongers are true and there'll never be a trial again in the United States. 187 00:14:59.740 --> 00:15:06.220 What does this mean? What's good? Good means that the rules are not written anymore. 188 00:15:06.220 --> 00:15:11.820 So things will go back to being, there won't be a stare decisis. 189 00:15:11.820 --> 00:15:18.180 There won't be any need for courts to try to find a way to wiggle around old precedents to get to societal expectations. 190 00:15:18.180 --> 00:15:22.420 They'll just be able to say it. 191 00:15:22.420 --> 00:15:27.340 Same very similar thing, you know, as I said earlier, courts will find ways to wiggle around stare decisis. 192 00:15:27.340 --> 00:15:33.500 Let me see this in every single situation where there's a hard and fast rule that if society would demand a different result, 193 00:15:33.500 --> 00:15:39.460 the courts will almost always find ways around it. 194 00:15:39.460 --> 00:15:42.060 And also, people control their fates. 195 00:15:42.060 --> 00:15:45.420 If I don't want to accept a plea deal, I won't have to. 196 00:15:45.420 --> 00:15:55.100 If I disagree with the judge's result, he will use force to make me obey, or the threat of force. 197 00:15:55.100 --> 00:15:58.900 I'm not going to have time to discuss that. 198 00:15:58.900 --> 00:15:59.780 So what's lost? 199 00:15:59.780 --> 00:16:01.700 Jury nullification is lost. 200 00:16:01.700 --> 00:16:04.460 So juries are very good because they tell us 201 00:16:04.460 --> 00:16:06.620 what societal expectations are. 202 00:16:06.620 --> 00:16:09.900 If they go away, there's a fear that perhaps that process will 203 00:16:09.900 --> 00:16:12.620 start to go away. 204 00:16:12.620 --> 00:16:17.460 I question this, but I think this is something to at least discuss. 205 00:16:17.460 --> 00:16:20.960 There could be some constitution problems. 206 00:16:20.960 --> 00:16:23.260 If legislation is exclusively done by coercion, 207 00:16:23.260 --> 00:16:28.060 And so if I say you're going to buy health care or I'm going to beat you up, well, I'm 208 00:16:28.060 --> 00:16:32.220 not sure there's a really good way to get around that except for a trial because the 209 00:16:32.220 --> 00:16:37.940 fear of force is what's making that law effective, not societal order. That's a very real problem 210 00:16:37.940 --> 00:16:44.580 that I don't think Hayek addresses spot on. And that can be a real issue and that's something 211 00:16:44.580 --> 00:16:49.700 I'm actively researching as we speak. And that is it. Yeah, so that's my presentation. 212 00:16:49.700 --> 00:16:51.700 and I hope it was at least somewhat helpful.