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German Working Papers in Law and Economics
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Volume 2005

AUTHOR:
Vincy Fon and Hans-Bernd Schäfer

TITLE:
Incentive Effects of State Liability for Wrongful Conviction on the Level of Crime

SUGGESTED CITATION:
Vincy Fon and Hans-Bernd Schäfer (2005) "Incentive Effects of State Liability for Wrongful Conviction on the Level of Crime", German Working Papers in Law and Economics: Vol. 2005: Article 2.
http://www.bepress.com/gwp/default/vol2005/iss1/art2


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ABSTRACT:

The criminal justice system is not infallible. This unfortunate but unavoidable fact has been known for some time. For many reasons, in spite of advocacy raised as early as 1913 by Borchard to offer compensation to those wrongfully convicted and later exonerated, currently in the United States only 15 states, the District of Columbia, and the federal government have laws for such compensation. Further, the compensation is fairly meager, and compensation is usually not granted if the alleged criminal pleaded guilty in cases involving confessions. Outside the United States, a different era seems to be on the horizon. In recent years, the scope of state liability has been expanding through membership in international organizations and through international treaties. In particular, the Council of Europe’s Convention for the Protection of Human Rights and Fundamental Freedoms encourages compensation for anyone punished as a result of a wrongful conviction. Article 3 of Protocol 7, Compensation for Wrongful Conviction, states that: When a person has by a final decision been convicted of a criminal offence and when subsequently his conviction has been reversed, or he has been pardoned, on the ground that a new or newly discovered fact shows conclusively that there has been a miscarriage of justice, the person who has suffered punishment as a result of such conviction shall be compensated according to the law or the practice of the State concerned, unless it is proved that the non-disclosure of the unknown fact in time is wholly or partly attributable to him. Although this article lacks specifics, it clearly endorses compensation for the wrongfully convicted. People who are wrongfully convicted and later exonerated should be compensated for many reasons. The wrongfully accused typically incur huge legal expenses for defense. They lose their earning opportunities and their reputations while in prison, and they suffer psychological harm. It is just to compensate these victims -- society is responsible for rectifying its errors by helping these victims regain normal lives when they are released from prison. Following Borchard, scholars also raised the possibility of applying eminent domain principles to compensate those wrongfully convicted, making the case that takings are involved when these victims are incarcerated. Against this backdrop, our paper attempts to study the compensation problem in a different direction. We ask whether expanding the scope of state liability would improve the well-being of citizens after public wrongs occur. In particular, we propose that compensating the wrongfully convicted after exoneration could affect the aggregate level of crime. A model will be developed in which we first point out that the possibility of wrongful conviction, although it cannot be avoided, in fact increases the amount of crime committed as compared to the idealistic case of no erroneous conviction. Then the simple model is extended to show why state liability for wrongful conviction changes criminal behavior. We conclude that the net impact of the expansion of state liability is that the aggregate level of crime decreases.




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