Trusts, Litigation & Judicial Engagement

Many wealth transfers occur privately and through various trust instruments. For many, trusts are the legal instruments of choice and have persisted as the "centerpiece of professionally drafted estate plans since the 1960s" partly as they are thought to "cut courts out of the loop." Conventional wisdom implies that judicial intervention and engagement are required only if litigation emerges.

A recent paper by Christopher J. Ryan, Jr., et al., Uncontested Trusts in Courts, notes an anomaly. Specifically, their study of trust filings (N=1,431 cases; N=1,660 court petitions) in the San Francisco Superior Court over a seven-year period (Jan. 1, 2014, through December 31, 2020), finds that (and the figure reprinted below illustrates) 68 percent of these cases in the judicial system and 61 percent of the petitions involved uncontested (or non-litigated) trusts.

According to the paper, explanations for why this is so include "human error, changed circumstances, and the need to protect vulnerable parties." To be sure, and as the authors duly note, any such study restricted to a single jurisdiction and a relatively small time frame invites obvious generalizability concerns. Limitations aside, the findings may inform conventional wisdom about trust instruments and better instruct how to keep them out of courts.

Experimental Evidence of Type I and Type II Error Tradeoffs

In the criminal law context, one central tradeoff incident to the "beyond all reasonable doubt" threshold involves a core tradeoff between Type I (wrongful conviction) and II (wrongful acquittal) errors. Helping frame conventional wisdom surrounding this tradeoff includes Blackstone's admonition that “it is better that ten guilty persons escape than that one innocent suffer."

Much of the experimental research on this topic, according to a recent paper by Stanton Hudja (IIT-business) et al., Errors in the Pursuit of  Justice: An Experimental Study of Type I and Type II Tradeoffs, focuses on placing participants within the legal "beyond a reasonable doubt" standard. Doing so, however, and as the papers notes, "limits the ability to observe how people make justice-related decisions when left to their own judgment." This study, by contrast, explores how people make such Type I and II tradeoffs outside of the "beyond all reasonable doubt" frame.

To do so, the authors analyze how participants allocated a fixed number of points to "toward reducing the likelihood of either error, revealing their implicit priorities over fairness and punishment. By removing legal thresholds or normative framing, our design isolates participants’ underlying preferences over judicial outcomes.” Respondents in this study include university students (in-person) as well as an online general population sample.

Standard external validity limitations notwithstanding, the paper's main findings include that "most individuals prioritize reducing Type I error over Type II error, without legal or moral instruction." In addition, the results also reflect "meaningful heterogeneity: some participants focus on minimizing Type II error, while others seek a balance between the two." An excerpted abstract follows.

"... Across all treatments, participants consistently prioritize reducing Type I error, without the “beyond a reasonable doubt” standard. Resource effectiveness significantly influences allocation behavior, and we observe systematic demographic differences: men allocate more resources to reducing Type I error than women. These findings shed light on how individuals approach moral trade-offs in legal contexts and offer implications for institutional design and public support for criminal justice policies."