Law and Economics of Plea-Bargaining

1
Law and Economics of Plea-Bargaining

• Nuno Garoupa
• Universidade Nova de Lisboa CEPR

2
Basic Idea

• Law and Economics of Plea-Bargaining It is an
  efficient instrument of criminal procedure
  because it reduces enforcement costs (for both
  parties) and allows the prosecutor to concentrate
  on more meritorious cases.

3
Basic Idea

• Plea bargains are the criminal counterpart of
  civil settlements which Law and Economics has
  largely supported.

4
Yet

• Plea-Bargaining is highly controversial in common
  law countries, including the US and the UK
  England Wales
• Plea-Bargaining has been transplanted to civil
  law (France, Italy, Poland, Argentina) under
  severe criticism by traditional doctrinal
  approaches and apparently without a major
  empirical success
• Informal versions have been observed in Germany,
  the Netherlands and elsewhere (includes summary
  procedures for those who do not contest guilt
  unconditional and conditional dismissals
  confession of guilt to get a reduction in the
  sentence, warnings and reprimands).

5
Reality

• 95 of all convictions in the US are secured with
  a guilty plea
• Widely used in the UK (around 90)
• 8 of all convictions in Italy.

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This paper

• History of Plea-Bargaining why?
• Institutional details of Plea-Bargaining what we
  mean by plea-bargaining.
• Economics of Plea-Bargaining state of the art.
• Arguments against Plea-Bargaining.
• Important differences between plea-bargaining
  across countries.
• Sketch of a more comprehensive economic approach
• Conclusion
• References

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History of Plea-Bargaining

• Historical justifications are obscure.
• Reasons
• Bypass jury trials (US, England and Wales)
• Why plea bargaining and not bench trials?
• Workload (Italy, France, US, England and Wales)
• Empower prosecution (France)
• Against whom? Why?
• Jury ? back to bypass jury trials
• Judges ? why not use stricter sentencing
  guidelines
• Reduce costs for defendants
• Why not reform criminal procedure?
• Lawyer domination of legal proceedings (common
  law countries)

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The case of the US

• Dynamics in the 19th and early 20th century All
  cases go to trial, explicit bargaining, implicit
  bargaining.
• Introduction and existence of trial penalty by
  the end of 19th century.

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The case of the US

• Why did judges allow it?
• 1866 changes on rules of evidence to give
  defendants more rights at trial
• backlog of civil justice
• Rehabilitation approach to criminal law.

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The case of the US

• Plea bargaining was one of several methods
  employed by Anglo-American administrators to
  dispose of criminal cases without juries. When
  compared with other modes to bypass trial by jury
  (e.g., bench trial), it is less distinctive and
  less American.

11
The case of England Wales

• Formally introduced under the plea before venue
  system Criminal Procedure and Investigations
  Act 1996
• Judicial precedent has created the one-third
  discount for guilty-pleas, incorporate into
  criminal law later Criminal Justice and Public
  Order Act 1994, by now sentencing guidelines
  deal with it in detail Criminal Justice Act
  2003

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The case of England Wales

• Indication of sentence by judge is now possible
  CJA 2003
• Although there were some rules concerning the
  exchange of view between judge and defendant
  Turner rules which delimited the judges role in
  pre-trial negotiations.
• There are pre-trial hearings to facilitate
  exchange of information and bring about pleas of
  guilty
• There are several ways of negotiated diversion.

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The case of Italy(patteggiamento)

• Italy warrant a pretrial settlement opportunity
  to reduce delays, not to enhance prosecutorial
  discretion.
• PROSECUTOR
• Less concentration of resources because it is
  usually after the preliminary investigations have
  taken place
• Applies only to minor offenses which do not
  justify an intensive use of resources
• Prosecutor incentives seniority.
• DEFENDANT
• Apply to a minor group of defendants, hence less
  attractive to accept
• Lots of acquittals for loss of evidence or
  witnesses and amnesties granted regularly
• Delays make worthwhile to protract trials as long
  as possible to avoid jail

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The case of France(plaider coupable)

• Similar to the Italian system.

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Institutional Details

• What is Plea-Bargaining?

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Institutional Details

• Charge bargaining
• Multiple charges drop some in return for a plea
  of guilty to one of them
• Unique charge drop a serious charge in exchange
  for a plea of guilty to a less serious charge.

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Institutional Details

• Fact bargaining
• Agreement for a selective presentation of facts
  in return for a plea of guilty.

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Institutional Details

• Specific fact bargaining
• Nolo Contendere Pleas accepts a sanction without
  pleading guilty
• Alford Pleas accepts a sanction but defendant
  asserts innocence.

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Institutional Details

• Plea Bargains there is a specific discount for
  pleading guilty.
• Plea before venue the defendant is put to a
  decision in early stages
• In pre-trial hearings the prosecutor and the
  defendant exchange information before bringing a
  plea bargain
• During the trial hearings (cracked trial due to
  late or delayed guilty plea).

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Institutional Details

• Explicit Bargaining Prosecutor makes a sentence
  recommendation Judges indicate the sentence they
  are minded to impose.
• Implicit Bargaining Defendant pleads guilty,
  considering the existence of sentence discounts
  or the possibility of achieving a particular
  sentence.
• Negotiated Diversions Warnings and reprimands in
  return for some restitution.

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Economics of Plea Bargaining

• Optimism of Economics with respect to
  Plea-Bargaining

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Economics of Plea Bargaining

• Part of efficient criminal procedure because
  reduces costs and allows prosecutor to allocate
  resources more effectively.
• Part of efficient law enforcement (social welfare
  maximizing) because reduces costs and
  uncertainty.
• Plea-Bargaining is efficient because it is just
  like discretion in a regulatory proceeding.

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Economics of Plea Bargaining

• Plea Bargaining provides
• consistent signals that can enhance prosecutorial
  decisions.
• for efficient screening of cases.
• for efficient decision to stand trial.
• consistency with the low-probability high-penalty
  enforcement strategy.

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Economics of Plea-Bargaining

• Plea-Bargaining should be perceived and enforced
  as a contract between two parties and therefore
  it should enhance social welfare if voluntarily
  performed.

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Economics of Plea Bargaining

• Criminal defense expenditures result in lower
  expected penalties for the innocent at trial than
  the guilty and they help ensure that plea
  bargaining efficiently screens defendants.
• A plea bargain might give the lowest penalty to
  the most culpable defendant if increases the
  probability of conviction of conspirators.

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Economics of Plea Bargaining

• Plea-Bargaining helps enforcement agencies
  getting information for criminal convictions.

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Economics of Plea-Bargaining

• Minor Criticism of Economics against
  Plea-Bargaining

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Economics of Plea-Bargaining

• There is a possibility that plea bargaining might
  dilute deterrence
• Hence, the efficiency depends on the objectives
  of prosecutors Ex post objectives of prosecutors
  should determine ex ante criminal policies of
  legislator.

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Economics of Plea-Bargaining

• Increased sanctions can lead criminals to
  substitute between offenses and thus more severe
  crime.
• Use of plea bargain is determined by increasing
  trial costs and binding budgets, not social
  welfare.

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Economics of Plea-Bargaining

• Due to different prosecutorial objectives, plea
  bargaining increase social welfare in adversarial
  systems but not in inquisitorial.
• Judicial discretion affects the decision of
  granting plea bargain.

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Economics of Plea-Bargaining

• Summary of Economics of Plea Bargaining

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Economics of Plea-Bargaining

• Summary
• (1) Economics is quite positive about it
• (2) Relies on prosecutorial discretion being
  efficient
• (3) Downplays the role of judges.

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Arguments against Plea-Bargaining

• Plea-Bargaining is a disaster in criminal
  procedure
• Criminals receive undeserved leniency
• Undermines procedural guarantees for the accused
  (constitutional issue)
• Hurts the innocent
• Unfair bargains
• Strategic choice of moment to bring
  plea-bargaining
• Other questions.

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Arguments against Plea-Bargaining

• Inadequate and Undeserved Leniency

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Arguments against Plea-Bargaining

• Undermines
• Retribution
• Deterrence
• Sentencing proportionality.
• But usually does not look at the low probability
  of punishment.

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Arguments against Plea-Bargaining

• Undermines procedural guarantees for the accused

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Arguments against Plea-Bargaining

• The unavailability of the guilty plea is regarded
  as a guarantee of defendants rights
• Presumption of innocence
• Right to examine witnesses against the accused
• Right to a fair and public hearing
• It is controversial if compatible with ECHR.

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Arguments against Plea-Bargaining

• Discount for pleading guilty
• Imposes a penalty on the right to be trialed
• Penalizes those who exercise the right to
  presumption of innocence
• It induces self-incrimination.

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Arguments against Plea-Bargaining

• Prosecutors face pressure for convictions and
  plea-bargaining is a mechanism to get them at the
  expense of procedural guarantees batting
  effect.

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Defense of Plea-Bargaining

• All these rights and privileges are derogable if
  the defendant wishes so

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Arguments against Plea-Bargaining

• Hurts the innocent

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Arguments against Plea-Bargaining

• Selection of cases has two implications (i)
  innocents stand trial more frequently (ii) there
  is pressure for innocents to plead guilty.

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Defense of Plea-Bargaining

• Selection of cases mirrors the usual problem of
  type I (acquit the guilty) and type II errors
  (convict the innocent).

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Defense of Plea-Bargaining

• Innocent defendants will be induced to plead
  guilty
• As long as the probability of conviction is
  positively correlated with the probability of
  guilt, the selection-of-cases effect implies a
  reduced number of innocent defendants.
• The reason is that prosecutorial discretion is
  not unconstrained. Hence, even if there is an
  incentive to offer a plea to low probability
  convictions, prosecutors have to (i) select cases
  under a fixed budget (ii) cannot offer unlimited
  sentence discounts (iii) cannot control extra
  legal sanctions triggered by guilty pleas.

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Arguments against Plea-Bargaining

• Unfair bargains

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Arguments against Plea-Bargaining

• Plea-bargains can be unfair and favor the
  wealthy
• Plea bargains are not civil settlements because
  they not care only about (i) strength of evidence
  and (ii) expected punishment after trial. There
  are important factors such as psychological bias
  and structural forces (lawyer quality, agency
  costs, bail and detention, rules, sentencing
  guidelines and statutes) that produce skewed
  bargains..

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Arguments against Plea-Bargaining

• Plea-bargains cannot be seen as voluntary
  contracts because the affected parties lack the
  incentive to assure public interest in effective
  law enforcement and deny defendants a bargaining
  position to guarantee fair exchange.

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Defense of Plea-Bargaining

• Judicial intervention to avoid exceedingly
  lenient plea bargains. It is true that the
  economic theory says that one should accept plea
  bargains without judicial review because they
  allow an efficient use of prosecutorial
  resources. Plea bargaining with judicial review
  could be better because (i) avoid dilution of
  deterrence (ii) reduces the risk of wrongful
  convictions.
• By hindering the prosecutors ability to agree to
  exceedingly lenient sentences, courts increase
  the cost of handling weak cases without
  obstructing the prosecutors ability to settle
  stronger cases.

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Arguments against Plea-Bargaining

• Strategic choice of moment to bring
  plea-bargaining

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Arguments against Plea-Bargaining

• Choosing the moment for plea-bargaining
• Strategic management of information by both sides
  (rules of discovery)
• The reputation of the judge or the jury
• Regulation of legal framework judicial review.

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Arguments against Plea-Bargaining

• Other Questions

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Arguments against Plea-Bargaining

• There might be overcharging in order to put
  pressure for pleading guilty.

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Defense of Plea-Bargaining

• The effect cannot be so dramatic because there
  are two signals (for prosecutor and for jury) and
  both are correlated with guilt. Hence, the result
  will depend very much on the rules of discovery.

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Arguments against Plea-Bargaining

• Questions concerning uncertainty
• Plea bargains can only help risk-averse
  defendant, guilty or innocent. Efficient if we
  believe that innocent individuals are
  systematically more risk averse than guilty
  individuals.
• Uncertainty concerning the benchmark sentence.

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Defense of Plea-Bargaining

• If we allow only fixed discounts, they may
  partially solve the problems with respect to
  uncertainty.

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Institutional Differences in Plea-Bargaining

• Procedure
• Adversarial vs. inquisitorial criminal procedure
• Mandatory prosecution
• Judicial review
• Prosecutorial guidelines
• Rules of evidence.
• Sentencing
• Guidelines
• Prosecutorial proposed sentencing
• Judicial pre-commitment to sentencing
• Professions
• Judges
• Prosecutors
• Defense Lawyers.

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A More Comprehensive Economic Analysis

• Asymmetry of information sentencing benchmark.
• Defendants side lawyer (agency costs).
• Prosecutors side objectives (structure of
  profession)
• Third party effects
• Victims (retribution vs. secondary
  victimization)
• Judge (active vs. passive judicial review)
• Social welfare deterrence, sentencing
  proportionality.
• Timing
• Rules of evidence
• Sunk vs. saving costs.

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Conclusion

• The Economics of Plea-Bargaining has largely
  failed to assess institutional details (charge,
  fact and plea bargaining).
• Its over-optimism only recently has been
  confronted with the arguments against it.
• Still relies heavily on the efficient
  prosecutor model.
• Only recently has started looking at the possible
  advantages of judicial review.

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Conclusion

• The Economics of Plea-Bargaining has largely
  failed to influence the debate in Europe.
• It was unable to predict the relative failure of
  Italy (and possibly France)
• Although we do have ex post rationalization
  (bargaining as a solution to delays in trial
  rather than prosecutorial efficient allocation of
  resources).

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References (I)

• Richard Adelstein and Thomas J. Miceli,
  2001,Toward a Comparative Economics of Plea
  Bargaining, EJLE.
• Albert W. Alschuler, 1968, The Prosecutors Role
  in Plea Bargaining, U Chicago LR .
• Albert W. Alschuler, 1976, The Trial Judges Role
  in Plea Bargaining, Columbia LR .
• Albert W. Alschuler, 1981, The Changing Plea
  Bargaining Debate, California LR.
• Albert W. Alschuler, 1983, Implementing the
  Criminal Defendants Right to Trial, U Chicago
  LR.
• Andrew Ashworth and Mike Redmayne, 2005, The
  Criminal Process, 3rd edition, Oxford University
  Press.
• Scott Baker and Claudio Mezzeti, 2001,
  Prosecutorial Resources, Plea-Bargaining, and the
  Decision to Go to Trial, JLEO.
• Oren Bar-Gill and Oren Gazal, 2005, Plea Bargains
  Only for the Guilty, JLE.
• Stephanos Bibas, 2003, Harmonizing
  Substantive-Criminal-Law Values and Criminal
  Procedure The Case of Alford and Nolo Contendere
  Pleas, Cornell LR.

61
References (II)

• Stephanos Bibas, 2004, Plea Bargaining Outside
  the Shadow of Trial, Harvard LR.
• David Bjerk, 2004, Guilt Shall Not Escape Nor
  Innocence Suffer A Theory of Optimal Prosecutor
  Behavior when Defendant Guilt is Uncertain.
• Nicola Boari and Gianluca Fiorentini, 2001, An
  Economic Analysis of Plea Bargaining The
  Incentives of the Parties in a Mixed Penal
  System, IRLE.
• Thomas W. Church, 1979, In Defence of Bargain
  Justice, Law and Society Review
• C Y Cyrus Chui, 1990, Plea Bargaining with the
  IRS, J Pub Econ.
• Penny Darbyshire, 2000, The Mischief of
  Plea-Bargaining and Sentencing Rewards, Criminal
  Law Review.
• Frank Easterbrook, 1983, Criminal Procedure as a
  Market System, JLS.
• M. Feeley, 1997, Legal Complexity and the
  Transformation of the Criminal Process the
  Origins of Plea Bargaining, Israel LR.
• George Fisher, Plea Bargainings Triumph A
  History of Plea Bargaining in America, 2003,
  Stanford CA Stanford University Press.

62
References (III)

• Oren Gazal, 2005, Screening, Plea Bargains and
  the Innocent Problem.
• D. G. Gifford, 1983, Meaningful Reform of
  Plea-Bargaining The Control of Prosecutorial
  Discretion, U Illinois LR.
• E. Grande, 2000, Italian Criminal Justice
  Borrowing and Resistance, American Journal of
  Comparative Law.
• Gene M. Grossman and Michael L. Katz, 1983, Plea
  Bargaining and Social Welfare, AER.
• D. D. Guidorizzi, 1998, Should we Really Ban Plea
  Bargaining? The Core Concerns of Plea Bargaining
  Critics, Emory LJ.
• R. Heller, 1997, Selective Prosecution and the
  Federalization of Criminal Law The Need for
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  Discretion, U Penn LR.
• R. Henham, 1999, Bargain Justice or Justice
  Denied? Sentence Discounts and the Criminal
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• J. Herrmann, 1992, Bargaining Justice A Bargain
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• John J. Jackson, 2005, The Effect of Human Rights
  on Criminal Evidentiary Processes Towards
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• H. Jung, 1997, Plea-Bargaining and its
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• Bruce Kobayashi, 1992, Deterrence with Multiple
  Defendants An Explanation for Unfair Plea
  Bargains, RAND J Econ.

63
References (IV)

• Bruce Kobayashi and John Lott, 1992,
  Low-Probability-High-Penalty Enforcement
  Strategies and the Efficient Operation of the
  Plea-Bargaining System, IRLE.
• Bruce Kobayashi and John Lott, 1996, In Defense
  of Criminal Defense Expenditures and Plea
  Bargaining, IRLE.
• Maximo Langer, 2004, From Legal Transplants to
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  Plea-Bargaining and the Americanization Thesis in
  Criminal Procedure, Harvard International LJ.
• Yue Ma, 2002, Plea-Bargaining and Prosecutorial
  Discretion in the United States, France, Germany,
  and Italian A Comparative Perspective,
  International Criminal Justice Review.
• Thomas J. Miceli, 1996, Plea Bargaining and
  Deterrence An Institutional Approach, EJLE.
• Jennifer F. Reinganum, 1988, Plea Bargaining and
  Prosecutorial Discretion, AER.
• Jennifer F. Reinganum, 2000, Sentencing
  Guidelines, Judicial Discretion and Plea
  Bargaining, RAND J Econ.
• Joanne Roberts, 2002, Plea Bargaining with
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• Stephen J. Schulhofer, 1984, Is Plea-Bargaining
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• Stephen J. Schulhofer, 1988, Criminal Justice
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64
References (V)

• Stephen J. Schulhofer, 1992, Plea Bargaining as
  Disaster, Yale LJ.
• Stephen J. Schulhofer and I. Nagel, 1997, Plea
  Negotiations under Federal Sentencing Guidelines
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• Robert E. Scott and William J. Stuntz, 1992, Plea
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• Robert E. Scott and William J. Stuntz, 1992, A
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• Bruce P. Smith, 2005, Plea Bargaining and the
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• Ronald Wright and Marc Miller, 2002, The
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