Litigation, judicial path-dependence, and legal change

In this paper we consider the role that litigation and case selection play in the process of legal change. After identifying two necessary conditions for litigation, we examine the effect of judicial path dependence on the consolidation of liability rules and legal remedies, paying special attention to litigation with different win-loss ratios. We study the consequence of private litigation decisions on the contraction or consolidation of legal rules under various litigation and judicial environments. We also consider the relevance of the win-loss ratios, the existence and nature of positive litigation costs, and the weight of past precedents on the ongoing process of legal evolution.