"A further reason to regulate dispute resolution is that informal triad justice is vulnerable to subversion by the powerful. If one of the two disputants is economically and politically more powerful than the other, he can encourage the supposedly impartial judge to favor him, using either bribes or threats. The other side of this coin is access to justice: the less advantaged members of a society must expect justice rather than abuse from the state or powerful opponents. As the great German jurist Rudolf von Jhering exclaimed, “form is the sworn enemy of arbitrary rule, the twin sister of liberty”

For these, and possibly other reasons, most jurisdictions in the world heavily formalize legal procedures. Moreover, as legal historians clearly recognize, patterns of such regulation are intimately related to the civil versus common law origin of the country’s laws. These legal families originate in Roman and English law respectively, and were transplanted to many countries through conquest and colonization (by France, Germany and Spain in the case of civil 7 law, and England in the case of common law). Although legal systems of most countries have evolved since colonial times, key features of legal origin are often preserved through the centuries [La Porta et al. 1998, 1999].

There are different theories of how legal origin has shaped legal procedure in general, and formalism in particular. Hayek [1960] and Merryman [1985] attribute the differences to the ideas of the Enlightenment and the French Revolution. In France, the revolutionaries and Napoleon did not trust the judges, and codified judicial procedures in order to control judicial discretion. According to Schlesinger et al. [1988], in civil law countries “the procedural codes are meant to be essentially all-inclusive statements of judicial powers, remedies, and procedural devices.” Consistent with von Jehring’s logic, procedural formalism was seen as a guarantee of freedom. In England and the United States, in contrast, lawyers and judges were on the “right” side of the revolutions, and hence the political process accommodated a great deal more judicial independence. In the common law tradition, “a code is supplemental to the unwritten law, and in construing its provisions and filling its gaps, resort must be had to the common law” [Schlesinger et al. 1988]. As a consequence, less formalism is required in the judicial procedure.

Dawson [1960], Berman [1983], Damaska [1986], and Glaeser and Shleifer [2002] argue that the procedural differences between common and civil law actually go back to the 12th and 13th centuries. Glaeser and Shleifer [2002] attribute greater formalism to the need to protect law enforcers from coercion by disputing parties through violence and bribes. This risk of coercion was greater in the less peaceful France than in the more peaceful England, where neighborly dispute resolution by juries (coming closer to Shapiro’s ideal) was more feasible. The different approaches to legal procedure – motivated by the different law and order environments of England and France – were then transplanted through conquest and colonization to most of the rest of the world [Watson 1974, La Porta et al. 1998, Berkowitz et al. 2002].

The fact that most countries in the world inherited significant parts of their legal procedures – often involuntarily – is important for our analysis. At the econometric level, it suggests that legal origin can be used as an instrument for the degree of formalism of the legal procedure. At the substantive level, the nature of transplantation enables us to distinguish two hypotheses. If countries select their legal procedures voluntarily, then one can argue that greater formalism is an efficient adaptation to a weaker law and order environment. If, however, legal procedures are transplanted through colonization, the efficient adaptation model does not apply. Rather, we can attribute the consequences of legal formalism to the exogenously determined features of the legal procedure, and in this way consider the efficiency of alternative rules...

Countries with higher formalism, not surprisingly, have longer expected times of using the judicial system to evict a non-paying tenant or to collect a check. This result has important implications: it suggests that legal structure, rather than the level of development, shapes this crucial dimension of judicial efficiency... The results on expected duration raise the crucial question: does procedural formalism, at the cost of longer proceedings, secure better justice? The answer suggested by Table VI is No...

At the same time, the instrumental variable procedure cannot reject the hypothesis that the adverse effect of French civil law on the efficiency and quality of dispute resolution works through a channel other than formalism. For example, suppose that the transplantation of French legal rules is conducive to general state interventionism and bureaucratic inefficiency, as argued in La Porta et al. [1999], and that this channel undermines the performance of courts as well. In this case, we cannot be sure that formalism, as opposed to general interventionism, is the culprit...

There are two broad views of this evidence. According to the first, greater formalism is efficient in some countries: it can reduce error, advance benign political goals, or protect the judicial process from subversion by powerful interests. On this view, the various regulatory steps, such as reliance on professional judges and collection of written evidence, are there to secure a fair judicial process. Put differently, while heavily formalized adjudication appears problematic on some measures, it would be even more problematic without the regulation.

According to the second view, many developing countries accepted the formalism in adjudication they now have as part of the transplantation of their legal system from their colonizers. On this view, there is no presumption that the transplanted system is efficient. Although heavy procedural formalism has theoretically plausible reasons for its existence, the reality it brings is extreme costs and delays, unwillingness by potential participants to use courts, and ultimately injustice. At least some of the burdens of formalism may therefore be unnecessary, and could be relieved through reform, especially for simple disputes.

The evidence in this paper supports the second theory. Specifically, the evidence points to extremely long expected duration of dispute resolution, suggesting that courts are not an attractive venue for resolving disputes. Furthermore, we find no offsetting benefits of formalism, even when looking at a variety of measures of the perception of fairness and justice by the users of the legal system. Moreover, legal origin itself appears to determine judicial quality, other things equal, suggesting that formalism is unlikely to be part of an efficient design."

--- Courts: The Lex Mundi Project