Cost-containment and rationing are two separate issues. There is a system-wide interest in managing the total share of national resources that is spent on civil justice, although justice may be a luxury good: people have been choosing to spend more on it as the country has become richer. If this is the case, then efficiency rather than cost-capping may be a more realistic goal. The proper objective is to ensure that more justice is actually purchased rather than allowing the people who work in the system to make more money. Whatever the cost structure, there is also the distributional issue of who gets access for what. Even if we were to adopt an NHS-style solution of offering access to justice regardless of means and free at the point of use, we would still be operating within a budget fixed by the willingness of taxpayers to contribute funds to the national exchequer for this purpose. Just as the NHS has to rank order of claims, a National Legal Service would also have to decide an order of claims on the available resources.

Economists have developed a number of theoretical models of litigation but only recently, with the growing availability of data, have they been able to test these models. The current paper surveys this empirical literature. In particular, it looks at the decision to file/drop/settle/try a case, the timing of settlements, and the role of competition in the market for legal services; principally in the area of personal injury litigation. It draws on studies that have used qualitative data, as well as those based on quantitative data, and draws attention to the relative superiority of existing American data for the analysis of litigation.

This report explores the incentive effects of different arrangements for purchasing lawyers' services in litigation. In particular, it looks at the effects of using inter partes costs as part of the remuneration contract offered to solicitors. In five sections it:

• summarises economists' findings on the effects on litigation of (i) fee structures and (ii) cost allocation rules, including the balance between cost control and quality;

• describes the recent reform proposals (fixed cost scales under Woolf, legal aid reform, and conditional fees);

• analyses the incentives for quality and cost control created by these proposals and by hourly fees and compares three possible ways of combining inter partes costs with fixed- fee block contracts, and the effects they can have on quality and solicitors' incentives; and

• considers the results of that comparison in the context of the wider market for legal services.

Lord Woolf has proposed a new "fast track" procedure to deal with medium-sized civil claims on the basis of fixed costs. He recommended that before deciding costs levels, the Lord Chancellor's Department should conduct a "series of hypothetical studies" in which solicitors and judges work through scenarios based on real cases.

This study reports on six such hypothetical studies. It looks in detail at what work needs to be done under the new procedure, and how long it will take. It is the first systematic attempt to describe how the legal profession is likely to react to the fast track and cope with the considerable changes it entails.

Mediation and other forms of 'Alternative Dispute Resolution' are currently the subject of considerable interest and debate. It is argued that through mediation, civil disputes can be settled more amicably, more quickly and less expensively than by traditional litigation procedures or by court adjudication. In this report the author provides an evaluation of an experimental mediation scheme established in the Central London County Court through which litigating parties were offered the opportunity to have their cases mediated at the court.

The evaluation includes an assessment of:

• the demand for mediation and reasons for reluctance to mediate;

• motivation for mediating and the kinds of cases for which mediation is appropriate;

• the extent to which mediation can promote settlement and reduce the time taken to settle civil cases;

• different mediation strategies and the reactions of parties and their solicitors to the mediation process.

The report points to the need to educate the legal profession and litigants about the nature and potential of mediation, and the need to consider training and quality-control of mediators. The report also raises questions about the extent to which mediation is valued in its own right and how far the benefits of mediation and the acceptability of mediated compromises derive directly from flaws in the existing system of adjudication.

In this report, two specific suggestions for reforming the law on ancillary relief are examined. Both have been proposed to reduce judicial discretion. First, a mathematical formula, such as a rebuttable presumption to divide equally the whole pool of assets upon divorce - a form of community property - might be used in the absence of agreement between the parties dividing the assets. Secondly, legal enforceability could be accorded to pre-nuptial agreements relating to asset division upon divorce. Examination of these proposals shows that they could be welfare improving but would need to be forward looking and applied to marriages, rather than divorces.

This report is an evaluation of the services offered to litigants in person (LIPs) by a pilot project at the Citizens Advice Bureau located within the Royal Courts of Justice. The findings are based on the responses of 160 users of the service to a postal questionnaire. They provided information on:

• the proportion of clients seeking advice whose first language is not English;

• how the services on offer to LIPs came to their attention;

• their level of satisfaction with the advice received;

• whether they received advice on settlement of a dispute and, if so, whether they complied with such advice;

• others approached for advice before and after visiting the Citizens Advice Bureau at the Royal Courts of Justice.

The majority of clients expressed satisfaction with the advice they received. The report makes a number of recommendations for increasing awareness of the pilot project and improving the quality of the services offered.

In November 1996, the Lord Chancellor's Department (LCD) commissioned the management consultancy firm KPMG to undertake a study of the Ancillary Relief Pilot Scheme. This scheme involves the application of a draft rule making a number of changes to ancillary relief procedure and timetables in a number of pilot courts, while the remainder of the courts continue to operate under their existing procedures.

The purpose of the study was to evaluate the pilot scheme against criteria of:

• reducing duration of cases;

• increasing settlement rates;

• reducing costs.

From the 26 April 1999, under the Civil Justice Reforms, the Fast Track will be the new procedure for resolving cases above the relevant small claims limit and below £15,000. The vast bulk of cases in the civil courts will fall within the Fast Track.

This study reports on a one-day simulation of Fast Track procedure. The research was commissioned to uncover any potential problems in the procedure and to identify future training requirements for court staff, solicitors and District Judges. The research piloted the operation of the Fast Track with practitioners, who used the new rules and forms to litigate a range of hypothetical cases. Participants' responses to, and perceptions of, the Fast Track form the basis of the research findings. The report identifies a series of issues for further consideration and concludes with proposals for future monitoring and research.