ECONOMIC ANALYSIS OF SMALL VALUE DISPUTES IN THE REPUBLIC OF SERBIA

Abstract

Small value disputes in the Republic of Serbia represent a great burden on the efficient working of the civil courts. Based on the setting of different expectations model, the economic analysis of small value claims shows tendency to initiate frivolous litigation, large disproportion between litigation costs and the value of a small claim, uneconomical litigation, excessive incentives for litigation and too established high threshold value. The paper analyses the economic effects of the planned changes in civil procedural rules of small value disputes. Based on the proposed changes, it is expected: the reduction of litigation costs, especially the attorney's fees the more economical litigation procedure and that lowering the threshold value of small dispute, will be more harmonized with the average monthly salary and GDP. Based on the set model of settlement, it's expected that the lowering the threshold value of a small dispute should lead to a higher settlement rate, as well as that any increase in court fees and reduction of the opposing party’s optimism can lead to higher probability of settlement. The paper presents concrete proposals for improving the efficiency of resolving small value disputes.