Peer effects in judicial decisions: Evidence from Spanish labour courts

Abstract

The current paper seeks to explain differences in the number of layoff disputes resolved in favour of workers in Spanish labour courts. Although legal decisions should be based solely on an objective analysis of a case, the literature has shown that judges are influenced by socioeconomic conditions. In particular, economic research has revealed disparities in rulings depending on the economic cycle. This paper explores a different issue: namely, whether local and/or regional patterns may impact judicial decisions. For this purpose, we use a General Council of the Judiciary database, which provides court level information on the number of cases resolved in favour of the worker by judges between 2004 and 2010. From a methodological point of view, we use spatial econometrics. Specifically, we suggest different spatial correlation matrices to find local and/or regional patterns. Underlying the current analysis is the notion that judges might be influenced by the decisions taken by their colleagues in neighbouring provincial or even regional courts, given the existence of a High Court in each region which acts as the highest authority before which appeals may be filed. HIGHLIGHTS Are judges' decisions affected by those of their colleagues in neighbouring courts? There is no global spatial correlation at a geographical level in judges' decisions. It is found spatial correlation at an administrative level in judges' decisions. The results show evidence of what we have called "reversal and emulation effects"

The economics of employment tribunals

“…But their importance is becoming established as an empirical regularity, albeit the results are sometimes contradictory. For example, studies for both Italy and Spain, using different methods and levels of aggregation, find that judgments in favor of employees are countercyclical, in contrast to the findings noted in a study for Great Britain [12]. Some recent studies also consider other departures from pure legal decision making models, with evidence in Spain, for example, of spillover effects from judges in neighboring courts, arising from compliance with group norms ("peer emulation" effects) or fear of reversals on appeal [12].…”

“…For example, studies for both Italy and Spain, using different methods and levels of aggregation, find that judgments in favor of employees are countercyclical, in contrast to the findings noted in a study for Great Britain [12]. Some recent studies also consider other departures from pure legal decision making models, with evidence in Spain, for example, of spillover effects from judges in neighboring courts, arising from compliance with group norms ("peer emulation" effects) or fear of reversals on appeal [12]. These are interesting directions for research, especially given the shift in Great Britain toward judges sitting in tribunals without lay members in various claim types, including unfair dismissal cases.…”

“Peer effects” or “quasi-peer effects” in Spanish labour court rulings

“…In this regard, the paper aims to further the line of research initiated in Martín-Román et al (2015), an article which pointed to the existence of "peer effects" in Spanish labour courts 11 . Nevertheless, the argument followed here is quite different.…”

“…Strictly speaking, the real "peer effects" correspond to the endogenous effects in Manski's classification. This corresponds to the "emulation effect" defined in Martín-Román et al (2015). Correlated and exogenous effects are also social effects although their rationale differs somewhat.…”

“…The study by Martín-Román et al (2013) reports that, on average, replacement judges tended to rule more in favour of the worker, particularly during the years of economic crisis (greater dispersion was also reported in their decisions). In the study by Martín-Román et al (2015), conducted using spatial econometrics techniques, the conclusion was that judges dealing with labour jurisdiction cases were influenced by the decisions taken by their colleagues acting in nearby courts. The authors claim that such behaviour highlights the existence of "peer effects" in Spanish labour courts or, to use their own words, an "emulation effect".…”