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An economic analysis of the criminal proceedings in civil-law countries
International Review of Law and Economics (1991), 11(111-116)
NOTE AN ECONOMIC ANALYSIS OF THE CRIMINAL PROCEEDINGS IN CIVIL-LAW COUNTRIES C. Y. CYRUS CHU
Department of Economics, National Taiwan University; and Institute of Economics, Academia Sinica Nankang, Taipei 11529, Taiwan I. INTRODUCTION Under the U.S. legal system, trial-settlement problems for civil and criminal cases are handled differently. For civil cases, suits can be directly filed and dropped by individual victims acting as plaintiffs. For criminal cases, suits can be filed and dropped only by public prosecutors acting as plaintiffs, and in principle, victims can not directly settle with offenders even if they want to. In civil-law countries, however, criminal proceedings against many crimes (mostly minor) are allowed to be filed and dropped directly by individual victims. In West Germany and the Republic of China, for example, crimes such as theft among close relatives, seduction, libel, ordinary bodily harm, crimes against privacy or secrecy, fraud, and damage of properties can be prosecuted only when the victims so request, even if the injurer is caught as a flagrante delicto. The purpose of this paper is to analyze the merits and demerits of the civil-law criminal proceedings corresponding to crimes for which direct settlements between victims and offenders are allowed. It is our contention that such a system has a (litigation) cost-saving effect after the offense is committed, and a deterrence-dilution effect before the offense is committed. Therefore the question whether victims should be the sole determinator of filing or withholding criminal proceedings against offenders has to be reviewed in the light of the relative sizes of the above-mentioned post-offense cost-saving effect and the ex-ante deterrence-dilution effect. ~ Using our model we are able to explain why in most civillaw countries it is up to the victims to decide whether to file suits for minor crimes. The rest of this paper is arranged as follows. We shall first discuss our basic model and the offender's optimal decisions under different criminal proceedings in section II. The generated impact on total social costs will be analyzed in section III. The final section presents concluding remarks.
Very helpful guidance and comments were provided by professor Robert Cooter, whom I gratefully acknowledge. ITo my knowledge, other research concerning the settlement-deterrence interactions focuses upon civil cases. See, e.g., P'ng (1987) and Polinsky and Rubinfeld (1988). © 1991 Butterworth-Heinemann
!12
Criminal proceedings in civil-law countries
II. M O D E L L I N G T H E O F F E N D E R ' S O P T I M A L D E C I S I O N U N D E R DIFFERENT REGIMES Two points should be made before proceeding to our formal analysis. Firstly, for criminal cases where the victim is the sole witness, it is clear that his decision on whether to c o o p e r a t e in the process of prosecution can absolutely d e t e r m i n e the state's decision to file or to drop the suit, and there is not much distinction between U. S. and civil-law criminal proceedings. The major difference between these two systems appears when there are witnesses and evidence other than what the victim can provide. In this situation, if the victim does not c o o p e r a t e , the U. S. prosecutor can still file the suit; but with the victim's reluctance, no criminal suit can be filed in civiMaw countries if the criminal proceedings c o r r e s p o n d i n g to the crime in question grant the right of filing suits exclusively to the victim. Secondly, as we discuss the pros and cons of civil-law criminal proceedings, since the corresponding offenses are always both crimes and torts, it is n e c e s s a r y to explain the interaction between civil and criminal actions in civil-law countries. Under the U.S. legal system, civil actions must be separated from criminal ones, whereas in most civil-law countries, civil actions may by attached to criminal actions2 Given the influence the victim can assert vis-a-vis the disposition of a criminal proceeding, the possibility of filing both the civil and the criminal suits certainly crosses his mind. If a civil action has to be separated from a criminal one, with each incurring separate litigation cost, then there will be more than one trial-settlement strategy combinations for the victim to choose from, and our analysis will be more complicated. In order to simplify our presentation, it is assumed in later analysis that, as in civil-law countries, civil actions can be attached to criminal ones and involve only one round of litigation cost. This implies that it will not be in the interest of the victim to file only one suit if he wishes to file any suit at all, and that both suits can be used as bargaining chips while negotiating with the offender. When the victim can choose whether or not to go to trial with the offender, it is very likely that he is willing to settle out of court, especially when trials are costly and subject to delays. But as most potential offenders k n o w this, the deterrent effect of post-offense punishment will be diluted. 3 In the following model used to study this problem, there is one risk-neutral injurer and a c o n t i n u u m of risk-neutral victim types. The magnitude of harm depends on the victim's type and the offender's choice of activity. If the offender is identified and the case goes to trial, it is assumed that the victim will win. We also suppose that each side bears its own litigation costs, and no costs are incurred in the settlement process. Let Y = = t'y = Z = 8 =
bey)
P = y'h(z) = f(z) = ot --
offender's level of activity offender's net benefit from offensive activity fine on convicted offender index of victim's type (0 -< z -< 1) the probability that the offender can be identified with evidence other than what the victim can provide probability that the offender is identified by the victim harm to victim of type z probability density of z each victim's litigation cost
21f it is the latter case, the compensatory damages will be awarded at the criminal trial. 3See Shavell (1985) for more explanation.
C. Y. CYRUSCHU
113
13 = offender's litigation cost q --- public p r o s e c u t o r s ' litigation cost m = " s o c i a l h a r m " per unit of y caused by the offender but not perceived by the victim. The m variable characterizes the social cost of damage to social order or morale due to the offense. All the above variables and functions are a s s u m e d to be k n o w n to both p a r t i e s ? The victim type is arranged so that h'(.) > 0. Let us assume that there is no m e a s u r e m e n t problem so that the c o m p e n s a t o r y damages to the victim resulting from a trial always equals the actual harm caused: y h ( z ) . W h e n a victim's h a r m e x c e e d s his trial cost, he will sue because he will recover more than his litigation cost. Since a n y settlement will only make the victim even better off, his decision of filing suit will not be affected by whether his suit will end up with a trial or settlement. 5 W h e n the victim's harm is less than his trial cost, he could not m a k e his suit a credible threat to the offender, and hence it is useless to bring a n y suit. Thus, a n y victim with z > z* will bring suit, where z * ( y ) is implicitly defined by yh(z*)
= ot
(1)
Clearly, d z * ( y ) / d y < 0 u n d e r the a s s u m p t i o n h'(.) > O. W h e n a victim sues the offender, he will be assigned a public prosecutor. This prosecutor will be in charge of the legal matters before and at the trial. Suppose, first, that the criminal proceedings in question grant the right of filing and dropping suits exclusively to the victim (regime 1). In this situation, the victim can drop the case before trial if he is willing to settle with the offender. The settlement compensation will be s o m e w h e r e b e t w e e n the victim's net gain from trial ( y h ( z ) - ~) and the offender's net loss ( y h ( z ) + [3 + ty). L e t 0 < 0 < 1 be an index characterizing the victim's bargaining strength, then the c o m p e n s a t i o n will be (1 - O)[yh(z) - or] + O[yh(z) + [3 + ty] = y h ( z ) - ot + O(ot + 13 + ty) Assuming zero settlement cost, all cases will always be settled out of court, and none will be brought to trial. 6 The offender therefore chooses y to maximize his expected net return: max,, b(y) - p
fzI*[y) [ y h ( z )
-
et + O(ot + [3 + t y ) l f ( z ) d z
(2)
Let y~ be the optimal choice o f activity by the offender in regime 1.
'Readers may notice that the specification here is quite similar to the one in Polinsky and Rubinfeld (1988) except that some interpretations are different. More detailed explanations about the interactions between the offender and the victim can be found therein. ~This is essentially the same condition Polinsky and Rubinfeid (1988) derived. However, under different assumptions about the information structure of the model, the victim's decision to sue may depend on the likelihood and/or magnitude of settlement. See Bebchuck (1988) and Cooter and Rubinfeld (1989) for a more general discussion. ~For 1 > 0 > 0, it is clear that yh(z) - ~x + O(et + (3 + ty) is always greater than yh(z) and less than yh(z) + [3 + ty, and hence both sides will always prefer settlements than trials. In Polinsky and Rubinfeld (1988), settlements happen with a probability value, which is assumed to be a control variable by the government.
Criminal proceedings in civil-law countries
114
Now let us consider regime 2 where it is the prosecutor's responsibility to file suits against the offender as long as the evidence is sufficient to sustain the case. For the purpose of comparison, suppose the prosecutor will be acquainted with the offensive case only when the victim reports it. There are two cases to be considered: (a) If the prosecutor can find no evidence or witnesses other than what the victim is willing to provide, then the victim can always "force" the prosecutor to drop the case by refusing to cooperate. The victim will do so if the offender could provide him with a satisfactory settlement compensation, as given in (2). (b) Suppose the prosecutor can find other evidence against the offender, then he can let the case go to trial even without the victim's cooperation, 7 in which situation the offender will end up paying yh(z) + f3 + ty. Given that the former case happens with probability s, the offender's problem is to solve: 1
max b(y) - p
*(Y) [ ( 1
-
s)(yh(z) + f3 + ty)
V
+ s(yh(z) - ct + O(a + 13 + t y ) ] f l z ) d z
(3)
Let y~ be the optimal choice of activity by the offender in regime 2. Suppose the objective functions in (2) and (3) are both concave, by comparing the first order conditions of (2) and (3), it is easy to see that Y2 < Y~.
III. COMPARING TOTAL SOCIAL COSTS Our purpose is to compare the total social costs generated under two different regimes. Since the penalty is in the form of a fine, it would not incur any social cost. Total social costs (SC) in each regime therefore include the sum of the expected harm and the expected trial and litigation cost, minus the benefit of the offender:
SC, = y{ SC2 = Y2
fo
f0I (h(z)
+ m)f(z)dz - b(y~)
(h(z) + m)f(z)dz + p ,~ll-*(v'_,)(l - s)(o~ + 13 + q)f(z)dz - b(y*z)
(4) (5)
It is noticed that in regime 1 there is no litigation cost because the victim always prefers to settle with the offender. From (2)-(3) and (4)--(5), one finds that as s converges to 1, Y2 converges to y~, and the third term of (5) disappears. Therefore as s is close to one, SCt will be very close to SC2, and the problem of choosing regimes becomes uninteresting. In general, the difference between SC~ and SC2 is composed of three parts:
SC1 - S C 2 = (ft + m)[y~
where h =
f0
-
y~]
+
b(y~)
-
b(y;)
-
P
f,
z*(y;)
(I - s)(ot + 13 + q)flz)dz
(6)
h(z)f(z)dz.
7If the prosecutor's performance evaluation is positively related to the number of convicted cases, he will have incentive to make the offender face the court trial. Since there is no plea-bargaining system in most civil-law countries, we do not have to consider the situation where the prosecutor can "settle" with the offender.
C. Y. CYRUSCHU
115
Since the offender in the first regime would commit more offensives (y~ > Y2), the corresponding expected harm will increase, and the first term on the right hand side of (6) represents the deterrence-dilution effect of regime 1. The first two terms together constitute the net difference in social cost due to the change in the offender's activity level. The third term characterizes the additional post-offense litigation costs resulting from not allowing the victim to drop his suit in regime 2. It is clear from (6) that whether it is socially desirable to propose a negotiable criminal proceedings in civiMaw countries depends on the relative magnitude of these effects. Differentiating (6) with respect to m yields d ( S C , - SC2) = [y] _ Y'z] > O, dm
which means that as the social harm of the offense is larger, regime 2 is more likely to be superior. Since severe crimes are more likely to deteriorate the public order or morale of the society, their corresponding social harms which are not perceived by victims tend to be huge. This observation seems to be consistent with the fact that in civil-law countries only criminal proceedings corresponding to relatively minor crimes grant the right of filing suit exclusively to the victim.
IV. F U R T H E R R E M A R K S There are other aspects of the model that deserves further discussion. For example, it has always been a debatable question that if a rape offender can be identified, should we let the prosecutor file suit against the offender regardless of the victim's intention? On the one hand, consistently sueing the identified offender can deter other potential offenders; on the other hand, the victim of each suit case will unavoidably incur some reputation or psychologicol damage in trial, which is another kind of "litigation" cost. The trade-off can also be revealed in Equation 6 given above. In the model of sections II and III, it is assumed that there are no settlement costs for both parties. Intuitively, if the settlement cost for some crimes are likely to be low, it seems better to let the offender and the victim (instead of the court) work out the solution. For crimes such as theft among close relatives, crimes against privacy or secrecy in West Germany, the victim and the offender are likely to be close, and it is conjectured that this might be a reason why prosecutors are not encouraged to file suits independently for such crimes. But one should also keep in mind that there is always a deterrence-dilution effect if the offender can foresee that his close relatives are unlikely to sue him for theft. Finally, one can relax the assumption that the victim can always win the case if he brings it to trial. Since the proof needed for winning a civil case in general is less than that for winning a criminal one in practice, the victim can choose among various civil-criminal, trial/settlement mixes, and does not have to attach his civil suit to the criminal one. We did not take into consideration such complication in our model, although these rich strategy combinations seem to deserve more research effort in the future.
REFERENCES Bebchuk, Lucian A., "Sueing Solely to Extract a Settlement Offer, " 17 Journal o f Legal Studies, 437-50 (1988).
I 16
Criminal proceedings in civil-law countries
Cooter, Robert D. and Daniel L. Rubinfeld, "Economic Analysis of Legal disputes and Their Resolution," 27 Journal of Economic Literature, 1067-97 (1989). Polinsky, A. Mitchell and Daniel L. Rubinfeld, "The Deterrent Effect of Settlements and Trials," 8 International Review o f Law and Economics 109-16 (1988). P'ng, 1.P.L., "Litigation, Liability and Incentives for Care," 34 Journal of Public Economics 61-85 (1987). Shavell, Steven, "Criminal Law and the Optimal Use of Nonmonetary Sanctions as a Deterrent," 85 Columbia Law Review 1232--62 (1985).
NOTE AN ECONOMIC ANALYSIS OF THE CRIMINAL PROCEEDINGS IN CIVIL-LAW COUNTRIES C. Y. CYRUS CHU
Department of Economics, National Taiwan University; and Institute of Economics, Academia Sinica Nankang, Taipei 11529, Taiwan I. INTRODUCTION Under the U.S. legal system, trial-settlement problems for civil and criminal cases are handled differently. For civil cases, suits can be directly filed and dropped by individual victims acting as plaintiffs. For criminal cases, suits can be filed and dropped only by public prosecutors acting as plaintiffs, and in principle, victims can not directly settle with offenders even if they want to. In civil-law countries, however, criminal proceedings against many crimes (mostly minor) are allowed to be filed and dropped directly by individual victims. In West Germany and the Republic of China, for example, crimes such as theft among close relatives, seduction, libel, ordinary bodily harm, crimes against privacy or secrecy, fraud, and damage of properties can be prosecuted only when the victims so request, even if the injurer is caught as a flagrante delicto. The purpose of this paper is to analyze the merits and demerits of the civil-law criminal proceedings corresponding to crimes for which direct settlements between victims and offenders are allowed. It is our contention that such a system has a (litigation) cost-saving effect after the offense is committed, and a deterrence-dilution effect before the offense is committed. Therefore the question whether victims should be the sole determinator of filing or withholding criminal proceedings against offenders has to be reviewed in the light of the relative sizes of the above-mentioned post-offense cost-saving effect and the ex-ante deterrence-dilution effect. ~ Using our model we are able to explain why in most civillaw countries it is up to the victims to decide whether to file suits for minor crimes. The rest of this paper is arranged as follows. We shall first discuss our basic model and the offender's optimal decisions under different criminal proceedings in section II. The generated impact on total social costs will be analyzed in section III. The final section presents concluding remarks.
Very helpful guidance and comments were provided by professor Robert Cooter, whom I gratefully acknowledge. ITo my knowledge, other research concerning the settlement-deterrence interactions focuses upon civil cases. See, e.g., P'ng (1987) and Polinsky and Rubinfeld (1988). © 1991 Butterworth-Heinemann
!12
Criminal proceedings in civil-law countries
II. M O D E L L I N G T H E O F F E N D E R ' S O P T I M A L D E C I S I O N U N D E R DIFFERENT REGIMES Two points should be made before proceeding to our formal analysis. Firstly, for criminal cases where the victim is the sole witness, it is clear that his decision on whether to c o o p e r a t e in the process of prosecution can absolutely d e t e r m i n e the state's decision to file or to drop the suit, and there is not much distinction between U. S. and civil-law criminal proceedings. The major difference between these two systems appears when there are witnesses and evidence other than what the victim can provide. In this situation, if the victim does not c o o p e r a t e , the U. S. prosecutor can still file the suit; but with the victim's reluctance, no criminal suit can be filed in civiMaw countries if the criminal proceedings c o r r e s p o n d i n g to the crime in question grant the right of filing suits exclusively to the victim. Secondly, as we discuss the pros and cons of civil-law criminal proceedings, since the corresponding offenses are always both crimes and torts, it is n e c e s s a r y to explain the interaction between civil and criminal actions in civil-law countries. Under the U.S. legal system, civil actions must be separated from criminal ones, whereas in most civil-law countries, civil actions may by attached to criminal actions2 Given the influence the victim can assert vis-a-vis the disposition of a criminal proceeding, the possibility of filing both the civil and the criminal suits certainly crosses his mind. If a civil action has to be separated from a criminal one, with each incurring separate litigation cost, then there will be more than one trial-settlement strategy combinations for the victim to choose from, and our analysis will be more complicated. In order to simplify our presentation, it is assumed in later analysis that, as in civil-law countries, civil actions can be attached to criminal ones and involve only one round of litigation cost. This implies that it will not be in the interest of the victim to file only one suit if he wishes to file any suit at all, and that both suits can be used as bargaining chips while negotiating with the offender. When the victim can choose whether or not to go to trial with the offender, it is very likely that he is willing to settle out of court, especially when trials are costly and subject to delays. But as most potential offenders k n o w this, the deterrent effect of post-offense punishment will be diluted. 3 In the following model used to study this problem, there is one risk-neutral injurer and a c o n t i n u u m of risk-neutral victim types. The magnitude of harm depends on the victim's type and the offender's choice of activity. If the offender is identified and the case goes to trial, it is assumed that the victim will win. We also suppose that each side bears its own litigation costs, and no costs are incurred in the settlement process. Let Y = = t'y = Z = 8 =
bey)
P = y'h(z) = f(z) = ot --
offender's level of activity offender's net benefit from offensive activity fine on convicted offender index of victim's type (0 -< z -< 1) the probability that the offender can be identified with evidence other than what the victim can provide probability that the offender is identified by the victim harm to victim of type z probability density of z each victim's litigation cost
21f it is the latter case, the compensatory damages will be awarded at the criminal trial. 3See Shavell (1985) for more explanation.
C. Y. CYRUSCHU
113
13 = offender's litigation cost q --- public p r o s e c u t o r s ' litigation cost m = " s o c i a l h a r m " per unit of y caused by the offender but not perceived by the victim. The m variable characterizes the social cost of damage to social order or morale due to the offense. All the above variables and functions are a s s u m e d to be k n o w n to both p a r t i e s ? The victim type is arranged so that h'(.) > 0. Let us assume that there is no m e a s u r e m e n t problem so that the c o m p e n s a t o r y damages to the victim resulting from a trial always equals the actual harm caused: y h ( z ) . W h e n a victim's h a r m e x c e e d s his trial cost, he will sue because he will recover more than his litigation cost. Since a n y settlement will only make the victim even better off, his decision of filing suit will not be affected by whether his suit will end up with a trial or settlement. 5 W h e n the victim's harm is less than his trial cost, he could not m a k e his suit a credible threat to the offender, and hence it is useless to bring a n y suit. Thus, a n y victim with z > z* will bring suit, where z * ( y ) is implicitly defined by yh(z*)
= ot
(1)
Clearly, d z * ( y ) / d y < 0 u n d e r the a s s u m p t i o n h'(.) > O. W h e n a victim sues the offender, he will be assigned a public prosecutor. This prosecutor will be in charge of the legal matters before and at the trial. Suppose, first, that the criminal proceedings in question grant the right of filing and dropping suits exclusively to the victim (regime 1). In this situation, the victim can drop the case before trial if he is willing to settle with the offender. The settlement compensation will be s o m e w h e r e b e t w e e n the victim's net gain from trial ( y h ( z ) - ~) and the offender's net loss ( y h ( z ) + [3 + ty). L e t 0 < 0 < 1 be an index characterizing the victim's bargaining strength, then the c o m p e n s a t i o n will be (1 - O)[yh(z) - or] + O[yh(z) + [3 + ty] = y h ( z ) - ot + O(ot + 13 + ty) Assuming zero settlement cost, all cases will always be settled out of court, and none will be brought to trial. 6 The offender therefore chooses y to maximize his expected net return: max,, b(y) - p
fzI*[y) [ y h ( z )
-
et + O(ot + [3 + t y ) l f ( z ) d z
(2)
Let y~ be the optimal choice o f activity by the offender in regime 1.
'Readers may notice that the specification here is quite similar to the one in Polinsky and Rubinfeld (1988) except that some interpretations are different. More detailed explanations about the interactions between the offender and the victim can be found therein. ~This is essentially the same condition Polinsky and Rubinfeid (1988) derived. However, under different assumptions about the information structure of the model, the victim's decision to sue may depend on the likelihood and/or magnitude of settlement. See Bebchuck (1988) and Cooter and Rubinfeld (1989) for a more general discussion. ~For 1 > 0 > 0, it is clear that yh(z) - ~x + O(et + (3 + ty) is always greater than yh(z) and less than yh(z) + [3 + ty, and hence both sides will always prefer settlements than trials. In Polinsky and Rubinfeld (1988), settlements happen with a probability value, which is assumed to be a control variable by the government.
Criminal proceedings in civil-law countries
114
Now let us consider regime 2 where it is the prosecutor's responsibility to file suits against the offender as long as the evidence is sufficient to sustain the case. For the purpose of comparison, suppose the prosecutor will be acquainted with the offensive case only when the victim reports it. There are two cases to be considered: (a) If the prosecutor can find no evidence or witnesses other than what the victim is willing to provide, then the victim can always "force" the prosecutor to drop the case by refusing to cooperate. The victim will do so if the offender could provide him with a satisfactory settlement compensation, as given in (2). (b) Suppose the prosecutor can find other evidence against the offender, then he can let the case go to trial even without the victim's cooperation, 7 in which situation the offender will end up paying yh(z) + f3 + ty. Given that the former case happens with probability s, the offender's problem is to solve: 1
max b(y) - p
*(Y) [ ( 1
-
s)(yh(z) + f3 + ty)
V
+ s(yh(z) - ct + O(a + 13 + t y ) ] f l z ) d z
(3)
Let y~ be the optimal choice of activity by the offender in regime 2. Suppose the objective functions in (2) and (3) are both concave, by comparing the first order conditions of (2) and (3), it is easy to see that Y2 < Y~.
III. COMPARING TOTAL SOCIAL COSTS Our purpose is to compare the total social costs generated under two different regimes. Since the penalty is in the form of a fine, it would not incur any social cost. Total social costs (SC) in each regime therefore include the sum of the expected harm and the expected trial and litigation cost, minus the benefit of the offender:
SC, = y{ SC2 = Y2
fo
f0I (h(z)
+ m)f(z)dz - b(y~)
(h(z) + m)f(z)dz + p ,~ll-*(v'_,)(l - s)(o~ + 13 + q)f(z)dz - b(y*z)
(4) (5)
It is noticed that in regime 1 there is no litigation cost because the victim always prefers to settle with the offender. From (2)-(3) and (4)--(5), one finds that as s converges to 1, Y2 converges to y~, and the third term of (5) disappears. Therefore as s is close to one, SCt will be very close to SC2, and the problem of choosing regimes becomes uninteresting. In general, the difference between SC~ and SC2 is composed of three parts:
SC1 - S C 2 = (ft + m)[y~
where h =
f0
-
y~]
+
b(y~)
-
b(y;)
-
P
f,
z*(y;)
(I - s)(ot + 13 + q)flz)dz
(6)
h(z)f(z)dz.
7If the prosecutor's performance evaluation is positively related to the number of convicted cases, he will have incentive to make the offender face the court trial. Since there is no plea-bargaining system in most civil-law countries, we do not have to consider the situation where the prosecutor can "settle" with the offender.
C. Y. CYRUSCHU
115
Since the offender in the first regime would commit more offensives (y~ > Y2), the corresponding expected harm will increase, and the first term on the right hand side of (6) represents the deterrence-dilution effect of regime 1. The first two terms together constitute the net difference in social cost due to the change in the offender's activity level. The third term characterizes the additional post-offense litigation costs resulting from not allowing the victim to drop his suit in regime 2. It is clear from (6) that whether it is socially desirable to propose a negotiable criminal proceedings in civiMaw countries depends on the relative magnitude of these effects. Differentiating (6) with respect to m yields d ( S C , - SC2) = [y] _ Y'z] > O, dm
which means that as the social harm of the offense is larger, regime 2 is more likely to be superior. Since severe crimes are more likely to deteriorate the public order or morale of the society, their corresponding social harms which are not perceived by victims tend to be huge. This observation seems to be consistent with the fact that in civil-law countries only criminal proceedings corresponding to relatively minor crimes grant the right of filing suit exclusively to the victim.
IV. F U R T H E R R E M A R K S There are other aspects of the model that deserves further discussion. For example, it has always been a debatable question that if a rape offender can be identified, should we let the prosecutor file suit against the offender regardless of the victim's intention? On the one hand, consistently sueing the identified offender can deter other potential offenders; on the other hand, the victim of each suit case will unavoidably incur some reputation or psychologicol damage in trial, which is another kind of "litigation" cost. The trade-off can also be revealed in Equation 6 given above. In the model of sections II and III, it is assumed that there are no settlement costs for both parties. Intuitively, if the settlement cost for some crimes are likely to be low, it seems better to let the offender and the victim (instead of the court) work out the solution. For crimes such as theft among close relatives, crimes against privacy or secrecy in West Germany, the victim and the offender are likely to be close, and it is conjectured that this might be a reason why prosecutors are not encouraged to file suits independently for such crimes. But one should also keep in mind that there is always a deterrence-dilution effect if the offender can foresee that his close relatives are unlikely to sue him for theft. Finally, one can relax the assumption that the victim can always win the case if he brings it to trial. Since the proof needed for winning a civil case in general is less than that for winning a criminal one in practice, the victim can choose among various civil-criminal, trial/settlement mixes, and does not have to attach his civil suit to the criminal one. We did not take into consideration such complication in our model, although these rich strategy combinations seem to deserve more research effort in the future.
REFERENCES Bebchuk, Lucian A., "Sueing Solely to Extract a Settlement Offer, " 17 Journal o f Legal Studies, 437-50 (1988).
I 16
Criminal proceedings in civil-law countries
Cooter, Robert D. and Daniel L. Rubinfeld, "Economic Analysis of Legal disputes and Their Resolution," 27 Journal of Economic Literature, 1067-97 (1989). Polinsky, A. Mitchell and Daniel L. Rubinfeld, "The Deterrent Effect of Settlements and Trials," 8 International Review o f Law and Economics 109-16 (1988). P'ng, 1.P.L., "Litigation, Liability and Incentives for Care," 34 Journal of Public Economics 61-85 (1987). Shavell, Steven, "Criminal Law and the Optimal Use of Nonmonetary Sanctions as a Deterrent," 85 Columbia Law Review 1232--62 (1985).