An economic analysis of the Finnish rules governing the disclosure of information between parties in civil procedure
DOI:
https://doi.org/10.33344/vol1iss1pp27-49Abstract
The article is an economic analysis of the Finnish rules governing the disclosure of information between parties in civil procedure. The article explores the advantages and disadvantages of the Finnish system in comparison to the discovery-institution of the Common Law –countries.
According to Finnish Procedural law, the parties have a general duty to disclose all relevant information to the court. This duty does not, however, become a true sanctioned obligation until a request for disclosure by a party has been granted by the court. In practice, the conditions for granting such a request are quite strict. First, the party requesting disclosure must name the fact he or she wishes to prove, and this fact must be of relevance to the case at hand. Second, the party requesting disclosure must show the relevance of the requested information in relation to this fact. Third, the party requesting disclosure must show that the information requested is in the possession of the party against whom the request is directed and, finally, the requesting party must sufficiently describe the specific documents or objects concerned by the request.
Differing dramatically from the Finnish system, the discovery institution of the Common Law –countries does not only provide the parties with effective legal means to obtain all relevant information and impose hard sanctions in case of failure to disclose relevant information, but also imposes a duty to voluntarily disclose all relevant information to the other party before the actual trial.
The economic analysis of the discovery institution has concluded that to the extent discovery governs the voluntary exchange of information between parties, it lowers both the administrative and error costs of judicial procedure. Further, compulsory disclosure of information detrimental to the parties does lower the error costs of judicial procedure but not necessarily the administrative costs. Therefore, the effects of disclosure as a whole to the social costs of judicial procedure remain uncertain.
Economic analysis of the Finnish system leads to the following conclusions: A wider interpretation of the conditions for granting a disclosure request would be detrimental to the administrative costs of judicial procedure since the parties would be forced to disclose more detrimental information thus making it more difficult to reach settlements.
On the other hand, a wider interpretation of the conditions for granting a disclosure request would lower the error costs of judicial procedure. It should be noted that the Finnish rules concerning the losing party’s obligation to compensate the legal fees of the winning party do not provide an incentive to discovery abuse, which has been the case for example in the U.S.
In conclusion, the Finnish courts should not be too narrow when evaluating the conditions for granting a disclosure request, but should judge each request more on a case by case basis thus optimizing the social costs of judicial procedure.
