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Choice of law and the home-court advantage: evidence

American Law and Economics Review , Volume 2 (2) – May 1, 2000


Oxford University Press
Copyright © 2000 Oxford University Press
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Choice of law and the home-court advantage: evidence


This paper tests three separate hypotheses about inherent biases in the application of modern choice of law rules: (1) Brilmayer's 1980 hypothesis that such rules camouflage 'pro-resident, pro-forum-law, pro-recovery' biases, (2) Borchers's 1992 hypothesis that courts do not consistently apply the principles of the choice of law rule they claim to be applying, and (3) an economic hypothesis, presented in the paper, that only a 'pro-forum-law' bias is unambiguously consistent with economic efficiency, simply because it conserves the resources of the court and bar in the forum state. I find relatively strong support for the 'pro-recovery' bias of courts, weaker support for 'pro-forum-law' bias, and reject the 'pro-resident' bias. If anything, states retaining the rigid choice of law rules are more likely to favor their residents. Moreover, I reject Borchers's claim that courts do not take the modern approaches seriously. Indeed, in general, they follow Borchers's own predictions.
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