Abstract

Conventional wisdom suggests that forced information-sharing procedures, namely, discovery proceedings, are the only way to rectify information asymmetries between parties to a legal dispute. This Article challenges this notion. It argues that litigants can convey information indirectly, through a variety of vehicles we call “litigation signals.” For instance, by committing to “disarm” themselves of important preliminary claims, litigants convey confidence to their rival. We employ a game-theoretical model to provide a comprehensive account and typology of litigation signals and to identify conditions under which different classes of signal are actually workable. A discussion on litigation signals entails wide policy implications. First, the Article shows how litigation signals advance settlement by facilitating information flow between litigants. Second, it sheds new light on the heated debate over discovery proceedings. Given the availability to voluntarily transmit information, the detrimental effects of narrow discovery are more modest than they seem to be; and the costs of broad discovery are exaggerated. Third, the Article reveals specific litigation tactics that can be used as informative signals, suggesting a more nuanced judicial treatment thereof. Finally, the Article delineates procedures that courts could adopt to help parties transmit information more effectively.