Economics of Alternative Dispute Resolution -Focusing on "Environmental Dispute Adjustment Act"-

When individuals need to resolve their disputes with other individuals, they may often go not only to courts for trial but also to alternative methods of dispute resolution (ADR). Drawing upon a few recent studies, this article provides some economic explanation about why individuals make use of ADR instead of trial and/or settlement. By examining what the social interest is in ADR, it also provides a useful reference point by which one can evaluate the ADR system the Environmental Dispute Adjustment Act has developed to cope with complicated environmental disputes. Part I begins with defining the characteristics of environmental disputes that make environmental litigation less frequent. Due to the tendency of under-litigation involving environmental disputes, ADR is particularly needed for environmental disputes. An ADR system aiming at environmental disputes needs to be designed so as to i) minimize the total cost of resolving disputes, and simultaneously ii) to engage as many parties involved as possible and make an ideal communication structure where the parties involved can provide each other with the relevant information(Part II). Part III looks over the cost structure of ADR. The dispute resolution costs of ADR consist of ADR-using cost(operation cost) and misjudgment cost(error cost). To save the former, it is necessary to trade off the latter. Accordingly, an ideal ADR system must be such that the sum of both can be minimized. In general, ADR brings about less operation costs than a trial before the courts. Therefore the success of ADR depends upon how much it can minimize error costs. If one can design an ideal...이 논문은 서울대학교 법과대학 법학발전재단 출연 법학연구소 기금의 2006학년도 학 술연구비의 지원을 받았음