Legal uncertainty has a regressive distributive effect. There are sides who gain from increasing legal uncertainty, and sides who lose from it. Legal uncertainty leads to regressive settlements. A shift from a certainty legal regime to an uncertainty legal regime transfers wealth from risk-averse parties to risk-neutral parties via the settlement. Thus, since poor people are more risk-averse than rich people, a legal uncertainty leads to a transfer of wealth from poor people to rich people. Also, since women are at least perceived to be more risk averse than men, a legal uncertainty leads to a transfer of wealth from women to men. This means that legal uncertainty has a class regressive effect and also a gender regressive effect.
Law and Economics
Date of this Version
Uri Weiss, "The Regressive Effect of Legal Uncertainty" (December 2005). Tel Aviv University Law Faculty Papers. Working Paper 30.