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Can Litigation Improve the Law without the Help of Judges?

Is the common law "efficient"? Do actual tort liability rules minimize the sum of accident costs and accident-prevention costs? Do actual nuisance rules lead to optimal levels of output, optimal location patterns, and optimal use of "clean" technologies? At the least, have common law rules improved (on an efficiency scale) over time? These questions have been raised explicitly and implicitly by the growing literature on law and economics.' Three justifications for the statement that the common law tends towards efficiency have been offered: (i) judges actively seek efficiency;2 (ii) inefficient rules are litigated more often than efficient rules (differential litigation);3 and (iii) litigants who benefit from an efficient rule invest more in the litigation than those who favor an inefficient one.4 The first justification relies upon judicial insight to improve the law, whereas the second and third justifications do not. Certainly the law can improve over time due to judicial insight. For example, it can be shown that the standard of negligence in liability law would evolve towards efficiency if judges amend it according to a simple calculation of benefits and costs.5 However, it is difficult to contend that