The inefficiency of courts of justice: industry structure, capacity and misallocation

In this paper, we introduce an optimization model to quantify the trade-off between resource capacity utilization and disposition time for the caseload of courts of justice. The optimization model takes into account the impact of an increase in demand that may arise when disposition time is reduced. We employ the model to measure the impact of various policy reform scenarios on the length of trials, both at the court and system level. We do so by taking into account the potential reallocation of resources, using the population of Italian courts of justice over the 2005-2012 period. Our results show that if all policy scenarios we discuss were to be implemented, the average length of trials for civil cases would be more than halved, from the current 15.5 months to about 7 months. Implementing best practices, the single most effective policy would be equivalent to a 25% increase in the number of judges (which would otherwise cost around 100 million euros per year).