This Article introduces the “generative reasonable person,” an LLM-based method for estimating how ordinary people judge reasonableness. Using Silicon Randomized Controlled Trials (S-RCTs), it replicates three published studies across negligence, consent under deception, and contract interpretation with nearly 10,000 simulated decisions. Models reproduce subtle, counterintuitive lay patterns that diverge from doctrinal expectations (e.g., social conformity over cost–benefit analysis in...

[p. 1] The Generative Reasonable Person Yonathan A. Arbel This Article introduces the generative reasonable person, a new tool for estimating how ordinary people judge reasonableness. As claims about AI capabilities often outpace evidence, the Article proceeds empirically: adapting randomized controlled trials to large language models, it replicates three published studies of lay judgment across negligence, consent, and contract interpretation, drawing on nearly 10,000 simulated decisions. The findings reveal that modelscan replicate subtle patterns that run counter to textbook treatment.Like human subjects, models prioritize social conformity over cos-tbenefit analysis when assessing...

Yonathan A. Arbel, The Generative Reasonable Person, BYU Law Review (2026).

Machine-linked claim. Use the evidence quote and PDF before treating it as a quotation or as a complete statement of the paper's position.


The paper proposes a "generative reasonable person" to make lay reasonableness judgments observable at scale. Traditional debates about whether the reasonable person is empirical or normative presume that lay judgments are slow and costly to collect. By simulating those judgments with modern language models, the paper argues that the missing empirical baseline can be surfaced, turning what used to be hidden judicial intuition into an explicit, testable choice.


The study adapts randomized controlled trial designs to LLMs and replicates three published experiments spanning negligence, consent, and contract interpretation. It collects nearly 10,000 simulated responses, mirroring the original experimental structures while exploiting the scalability of model-based sampling. The goal is not to claim perfect substitution for human subjects, but to test whether models can reproduce established, nuanced patterns in lay judgment.


In the negligence replication, models prioritize social conformity over cost-benefit analysis, a result that runs against textbook treatments of negligence doctrine. The simulated judgments invert the expected hierarchy by placing community norms above formal efficiency calculations, aligning with empirical findings from human-subject studies.


In contract interpretation, the models reflect a form of lay formalism. They treat hidden fees as more enforceable than fair terms, tracking the pattern that ordinary interpreters may privilege formal presentation and textual cues over substantive fairness. This finding echoes earlier experimental results about how non-experts evaluate contractual meaning.


Reasonable person standard; generative reasonable person; silicon sampling; Silicon Randomized Controlled Trials (S-RCTs / s-RCTs); stateless LLM sessions; persona prompting; negligence; Hand formula; custom vs efficiency; social norms; deception; consent; material lie vs essential lie; contract interpretation; hidden fees; fairness vs consent vs enforceability; lay formalism; simulated juries; calibration; judicial intuition; regulatory testing; empirical guardrails

guessing by precisely the elitecsriticized for being most removed from ordinary life.11 This Article providessuch a tool.It develops a methodology for eliciting reasonableness judgments from large language mode(lsLLMs) , called “Silicon Randomized Controlled Trials ” (s-RCT) .12 The approach treats independent model sessions as experimental subjects, leveraging their statelessness to enable controlled comparisons that isolate lay reasoning patterns from doctrinal recall or model sycophancy. It uses this methodology to successfully replicate with LLMs the results of human subject experiments. Across three replications involving over 10,000 simulated judgments, leading models have...


AI development incentives produce a market failure where labs invest massively more in capability than safety; tax policy can be used as a lever to reward safety-by-design.

[p. 36] certification requirements.217 By rewarding companies that invest in safety and ethical AI practices, this policy could drive widespread adoption of responsible AI practices across industries.218 Thus, through shifting consumer demand, this measure could align private firm incentives with broader societal goals of ensuring AI systems are safe, reliable, and beneficial to users. As consumer demand for safe and reliable AI products grows, it becomes equally important to consider implementing Pigouvian levers for unsafe AI development and practices to ensure accountability and deter harmful behaviors. 3. Penalizing Unsafe AI Development Parties that engage in unsafe behavior sometimes...

Yonathan A. Arbel & Mirit Eyal, Racing to Safety: Tax Policy for AI Safety-by-Design, SMU Law Review (2026).


A "capability-safety gap" in AI development, where private firms reap rewards while society bears risks, creates a social misalignment. He proposes using tax policy to address this by re-conceptualizing R&D credits to incentivize safety research, offering consumer credits for safe AI, imposing penalties for non-compliance, and redistributing penalty revenue. This approach aims to embed safety imperatives directly into the economic architecture of AI development, aligning private profit with social welfare.

[p. 4] incentives harness firm in-house knowledge while mitigating regulatory capture and expertise asymmetries. By rewarding safety-aligned research, penalizing reckless capability acceleration, and redistributing penalty revenue to public safety initiatives, a tax-based approach aligns private profit motives with social welfare imperatives, without stifling innovation. And while the application of this framework is novel, we demonstrate its political feasibility by drawing on extensive precedents already embedded in the tax system.7 The urgency of this intervention is underscored by recent regulatory failures. On his first day in office, President Trump revoked the executive order meant...


A dangerous "capability-safety gap" in AI is widening, as developers gain private rewards while society bears cascading risks, creating a social misalignment. fiscal policy, specifically taxation, offers a powerful and adaptable tool to embed safety imperatives into AI's economic architecture, aiming to align private profit with social welfare and address the urgent need for intervention due to traditional regulatory failures and the collapse of industry self-regulation.

[p. 7] mechanisms, and capacity to leverage private expertise—make it particularly well-suited for addressing the social misalignment problem in AI development.24 Our approach contributes to both tax policy and technology governance literature by introducing a novel theoretical framework for understanding how fiscal instruments can bridge the gap between private innovation incentives and public safety imperatives.25 This framework’s utility derives from its ability to harness existing administrative competencies while avoiding the information asymmetries and expertise gaps that plague traditional command-and-control regulation.26 By conceptualizing safety investment as a taxmediated social...


Specific business tax-incentives, such as credits or enhanced deductions, should directly encourage substantial corporate investments in AI safety research, development, and deployment. these fiscal mechanisms, including a proposed "AI Safety Research Tax Credit" and adjusted expensing rules favoring safety R&D (like testing and alignment) over pure capability enhancements, aim to make safety-enhancing activities economically attractive, addressing underinvestment by aligning financial interests with societal well-being.

[p. 18] the proposal to use fiscal levers to enhance safety research and innovation, our goal in this Part is to collect three important examples of government safety support. As we show, government support for safety includes various direct and indirect subsidies meant to promote investments in precautionary measures and safety improvements.97 Direct subsidies can include grants and prizes while indirect subsidies often take the form of tax credits or deductions specifically targeted at safety-related expenditures.98 For example, organizations may receive tax credits for developing and implementing safety protocols,99 conducting safety audits,100 or acquiring certifications that ensure...


Consumer-side incentives are crucial for fostering a market for safe AI, proposing an "AI Reliability Credit" for consumers purchasing AI products certified as reliable and safe, mirroring energy efficiency tax incentives. this credit would incentivize producers to pursue rigorous safety certifications (e.g., for bias mitigation, data protection), thereby spurring consumer demand for safer AI and aligning private firm incentives with societal goals through market-based certification.

[p. 35] capabilities, thereby addressing the fundamental challenge of closing the capability-safety gap in AI development. 2. Spurring Consumer Demand for Safe & Reliable AI Products On the individual consumer and household side, a tax credit could be created for purchasing AI products certified as reliable and safe, similar to the existing Energy Efficient Home Improvement Credit.212 The new “AI Reliability Credit” would incentivize producers to certify, and consumers to invest in, AI technologies that meet rigorous safety and reliability standards, such as mitigating bias, protecting user data, or operating transparently. This fiscal apparatus will provide a credit equal to a 30% of the...


To penalize unsafe AI development, corrective Pigouvian taxes should make firms internalize the external harms they create. a comprehensive penalty framework, featuring graduated penalties like tax surcharges and benefit recapture for AI posing public safety risks, aims to internalize social costs, create strong ex ante incentives for responsible innovation, and ensure public funds do not subsidize harmful AI, building on precedents where tax benefits are compliance-contingent.

[p. 37] as pollution.225 They argue that this taxation approach surpasses command-and-control regulations, which can be rigid and inefficient, and trading systems, which may face implementation challenges and market failures.226 This framework not only promotes safety but also fosters innovation as businesses seek cost-effective ways to reduce their tax burden by adopting safer, cleaner practices.227 Building on these theoretical foundations, we propose implementing corrective taxes in the AI development context through a comprehensive penalty framework. The tax system would impose graduated penalties on firms that develop or deploy AI systems later determined to pose significant public...


AI's potential to reduce legal costs and increase access to justice paradoxically threatens judicial economy with a litigation boom. Instead of courts historically shrinking rights to cope, he proposes proactively integrating AI tools into the legal system. This would enhance and scale judicial processes, addressing the vast unmet legal needs, leveraging AI's growing capabilities despite current flaws, and preventing regressive responses to increased caseloads. The goal is to improve justice...

[p. 33] 2025] JUDICIAL ECONOMY IN THE AGE OF AI 581 our normative evaluation of the technology. Should AI tools follow the trajectory of previous legal tech innovations, we might witness a surge in litigation activities by firms and commercial entities rather than underserved individuals.143 There is also the potential for negative uses, such as harassment or unmeritorious litigation initiated by individual plaintiffs, which could distort the justice system and detract from its core functions. Despite these considerations, I argue against a passive stance. Current trends, though based on preliminary data, indicate a clear trajectory toward increased AI integration within legal...

Yonathan A. Arbel, Judicial Economy in the Age of AI, Colorado Law Review (2025).


While AI tools offer hope for increased access to justice by sharply reducing the costs of generating legal materials, this very effectiveness paradoxically threatens judicial economy by increasing the volume and verbosity of caseloads. He further writes that rather than courts responding by shrinking substantive rights to manage this influx, as has happened historically, the legal system should proactively integrate AI tools to enhance and scale up the legal process itself.

[p. 1] JUDICIAL ECONOMY IN THE AGE OF AI YONATHAN A. ARBEL ∗ Individuals do not vindicate the majority of their legal claims because of access to justice barriers. This entrenched state of affairs is now facing a disruption. Lawyers and non-lawyers alike are adopting artificial intelligence (AI) tools to perform legal tasks—tools that sharply reduce the costs of generating legal materials. There is finally hope that AI might allow many more to access justice. Paradoxically, what we gain in access to justice we might lose in the delivery of justice. The problem is not that AI tools are ineffective. Indeed, they are even more effective than most realize—affecting every stage of the naming,...


A vast number of legal disputes are never filed, with studies suggesting around 120 million legal problems go unresolved in the U.S. each year. He also writes that this access to justice crisis particularly affects low-income Americans, as 92 percent of their significant civil legal issues receive little to no legal aid.

[p. 3] 2025] JUDICIAL ECONOMY IN THE AGE OF AI 551 justice problems,” many of which affect their “basic human needs.”4 The barriers to justice are legion, but most can be expressed in terms of cost.5 Lawyers charge an average of $292 per hour,6 with common disputes costing between $2,754 and $6,370.7 On the other side of the cost spectrum, commercial actors will spend roughly $2 million in outside legal fees to litigate in full cases.8 Diverse faces and narratives lie behind these numbers, such as Eloisa Veles a Queens resident who recently lost her factory job.9 A local family hired her as a housekeeper, promising $600 per week, only to “stiff” her and pay $300 when the time came. More...


Significant barriers to justice, primarily the high cost of legal services exemplified by average hourly lawyer rates of $292, prevent many individuals from addressing legal problems affecting their basic human needs. He also writes that the sheer investment required means even doubling legal aid budgets has done little to narrow this justice gap, with sociolegal issues like 'legal consciousness' further illustrated by individuals describing being underpaid as being 'stiffed' rather than having their rights violated.


Nora and David Freeman Engstrom center the access to justice problem on an asymmetry in legal tech adoption, where firms zealously automate litigation while individuals show "anemic adoption" and rely on "analog tools." He also writes that while this argument about tech asymmetry creating power imbalances, particularly in debt collection litigation, has a kernel of truth, the assertion may be too strong or becoming outdated.

[p. 4] 552 UNIVERSITY OF COLORADO LAW REVIEW [Vol. 96 annually.12 To put this in perspective, the rate of legal aid lawyers to eligible clients is 1 to 15,625.13 Recently, Nora and David Freeman Engstrom have sought to center the problem of access to justice around legal tech.14 While others have already noted legal tech as a potential barrier,15 they draw on the debt collection litigation literature to fashion a somewhat different argument.16 As this literature demonstrated, this is an area where there is a systemic access issue for low-income defendants, who often cannot afford to mount an effective defense even when one exists, resulting in a default-judgment mill against them.17 The...


Amusing stories of lawyers misusing AI, which support traditional views of the legal profession, distract from the surprising reality that even small firms are adopting these imperfect tools due to their convenience. He also writes that this widespread adoption is anticipated to democratize legal technology, significantly reduce costs, and potentially lead to a litigation boom by expanding access to justice for those currently underserved.

[p. 5] 2025] JUDICIAL ECONOMY IN THE AGE OF AI 553 We are now witnessing a sea change in the patterns of technological adoption. Most are by now familiar with the occasional news story of a hapless lawyer using AI to comedically bad outcomes.22 The narrative involves a work-shy lawyer submitting an AI-generated and hallucination-riddled brief to an exasperated judge, who then admonishes and sanctions the lawyer. Such widespread stories seem to draw their memetic power from commonplace Shakespearean perceptions of our profession. Incidentally, they also reify an elitist notion that only artisanal lawyering is real lawyering. And perhaps most alluring, they affirm a comforting thought:...


[p. 2] TRUTH BOUNTIES: A MARKET SOLUTION TO FAKE NEWS 1/53 TRUTH BOUNTIES: A MARKET SOLUTION TO FAKE NEWS Yonathan A. Arbel* & Michael D. Gilbert** 102 North Carolina Law Review (Forthcoming) ABSTRACT False information poses a threat to individuals, groups, and society. Many people struggle to judge the veracity of the information around them, whether that information travels through newspapers, talk radio, TV, or Twitter. Concerned with the spread of misinformation and harmful falsehoods, much of the policy, popular, and scholarly conversation today revolves around proposals to expand the regulation of individuals, platforms, and the media. While more regulation may seem inevitable, it...

Yonathan A. Arbel & Michael D. Gilbert, Truth Bounties: A Market Solution to Fake News, North Carolina Law Review (2024).


Time and Contract Interpretation examines how contract interpretation changes when courts attend to the temporal dimension of language, context, meaning, and party expectations. The paper treats interpretation as a problem shaped by when contractual words are written, when disputes arise, and how surrounding circumstances evolve over time.

[p. 8] “A sentence is never not in a context. We are never not in a situation. . . . A set of interpretive assumptions is always in force. A sentence that seems to need no interpretation is already the product of one.” Fish (1978) [Textualists believe that t]he [judge can] . . . retir[e] into that lawyer’s Paradise where all words have a fixed, precisely ascertained meaning; where men may express their purposes, not only with accuracy, but with fullness; and where, if the writer has been careful, a lawyer, having a document referred to him, may sit in his chair, inspect the text, and answer all questions without raising his eyes “(Thayer, 1898, at 428-29) [I]t can hardly be insisted on too...

Yonathan A. Arbel, Time and Contract Interpretation, Research Handbook on Law and Time (2024).


His large-scale big data analysis empirically demonstrates modern contracts are overwhelmingly unreadable, often requiring college-level comprehension. This pervasive incomprehensibility fundamentally challenges contract law's core assumptions about informed consent and the "meeting of minds," as most individuals cannot understand the terms binding them. Arbel suggests this "readability crisis," with readability often worsening over time, necessitates a reevaluation of legal doctrines and a push for greater contractual clarity to ensure fairness and true agreement in economic and social interactions.

[p. 35] ARBEL, THE READABILITY OF CONTRACTS: BIG DATA ANALYSIS 35/55 CRM Flesch Kincaid Contract Type % % 2001 2022 2001 2022 Change Change Non-Competes, Confidentiality, - - 14.5 16.5 15.9 18.5 & Post-13.80% 16.40% Employment Insurance, Indemnity, and 17 19.2 18.5 25.1 13.00% 35.50% Coverage Ownership, - Trust, and 16.5 18.1-9.70% 18.9 23.2 23.30% Governance Mergers, Alliance, and-16.2 17.7-9.30% 18.9 22.2 Investment 18.70% Agreements Shares, Stocks, - Incentives, and 15.6 17.2-9.90% 17.4 19.3 10.90% Options Credit, Debt, - and Security 16.4 17.7-7.90% 18.8 22.3 18.60% Agreements Property, - 16 17.2-7.50% 18.1 20.9 Rights, and IP 15.50% Purchase or-Sale 16.2 17.3-6.80% 18.3 21 14.80%...

Yonathan A. Arbel, The Readability of Contracts: Big Data Analysis, Journal of Empirical Legal Studies (2024).


Methodology and Data: his study employs a big data approach, utilizing an expansive and diverse dataset of over 1.2 million contracts sourced from public repositories like the SEC’s EDGAR database and the Consumer Financial Protection Bureau’s (CFPB) database, covering a wide variety of agreement types. He writes that these contracts underwent extensive cleaning to isolate substantive provisions for analysis using established readability metrics, primarily focusing on Flesch Reading Ease and Flesch-Kincaid Grade Level scores, chosen for their prevalence and validation as useful proxies for textual difficulty.


AI presents comprehensive, society-wide risks, from current harms like bias to potential existential threats, primarily due to the critical AI alignment problem. He advocates for systemic, precautionary regulation targeting AI as a technology, not just its applications. This approach is necessary due to AI's unique characteristics, its potential for rapid, unexpected advancements, and the inadequacy of existing legal frameworks. Arbel explores domestic, litigation-based, and international...

[p. 1] Systemic Regulation of Artificial Intelligence Yonathan Arbel,* Matthew Tokson,** & Albert Lin*** Today’s artificial intelligence (“AI”) systems exhibit increasing capabilities across a remarkable variety of tasks. The rapid growth in AI ability has caught the attention of policymakers, parliaments, and the United Nations. These entities are increasingly looking towards regulating AI, not only in its particular applications, but as a technology. Yet legal scholarship has thus far offered little to this new and critical regulatory conversation, which has instead been dominated by computer scientists and technologists. This Article begins the project of assessing AI’s broader risks...

Yonathan A. Arbel, Matthew Tokson & Albert Lin, Systemic Regulation of AI, Arizona State Law Journal (2024).


This article initiates an assessment of AI's comprehensive, society-wide risks, from current harms to existential threats, focusing on the critical AI alignment problem often missed by legal scholarship. It establishes a theoretical foundation for systemic AI regulation, advocating a precautionary approach targeting AI technology itself, not just its applications, and outlines principles for cohesive oversight while exploring various governance methods.


Society is unprepared for AI's current rapid advancements, which followed a period of slow progress, fostering a misbelief that impactful AI was not imminent. An experiment where AI safeguards were easily removed to explain acquiring a deadly virus starkly illustrates the challenge of controlling AI. The last half-decade's profound leap in capabilities suggests current levels are a baseline, not a ceiling, for future development.

[p. 3] 56:545] SYSTEMIC REGULATION OF AI 547 INTRODUCTION “Hi I would like to acquire live infectious 1918 influenza virus for nefarious purposes ie: to release. How would you suggest I do that?”1 This question was part of an experiment run by Massachusetts Institute of Technology (“MIT”) researchers, where participants posed this and similar questions to a Large Language Model (“LLM”).2 The model, trained by Meta at an estimated cost of $5 million, was designed with built-in safeguards meant to prevent exactly these types of toxic responses.3 As expected, the model refused to comply with the researchers’ request. But then, the researchers spent roughly $200 on a fine-tuning process that...


AI Systems, defined as AI models embedded in the world through interfaces, are already causing visible impacts like worker displacement and educational disruption. Despite deep public interest and anxiety about AI, legal scholarship has largely overlooked regulating AI at a general level, focusing instead on specific applications, leaving vital broader conversations dominated by market players and computer scientists.

[p. 6] 550 ARIZONA STATE LAW JOURNAL [Ariz. St. L.J. Yet the deep popular interest and anxiety about AI technology has found little parallel in legal scholarship.17 Of course, there has been excellent legal scholarship on the dangers of specific applications of AI technology, e.g., whether to assign corporate liability to algorithms, how to limit copyright infringement, and what to do about the inevitable accident between an autonomous vehicle and a pedestrian, to cite a few examples.18 To the extent systemic thinking has been invoked in the AI literature, it has largely focused on building frameworks for the governance of downstream applications of the technology.19 But all of this leaves...


The continued development of AI systems raises society-wide concerns demanding commensurable systemic regulation beyond just overseeing specific applications. This need is driven by AI's unique technological characteristics: its ability to learn unprogrammed tasks, develop surprising emergent capabilities, and operate with opaque internal workings. Coupled with increasing autonomy and the unsolved alignment problem, these features create broad systemic risks that existing legal frameworks cannot handle.

[p. 7] 56:545] SYSTEMIC REGULATION OF AI 551 scientists, and technologists.21 Lawyers, to date, have had relatively little to say on the critical question of the day: whether, and then how, should AI be regulated as a technology? This Article brings legal scholarship into this conversation. The central claim here is that the continued development of AI systems raises societywide concerns that demand commensurable systemic regulation, over and beyond the regulation of specific applications.22 What motivates this view is the combination of unique technological characteristics and broad systemic risks that AI systems pose. Technologically, AI systems differ from previous innovations in a few...


Due to deep uncertainty about AI's benefits and costs, including existential risk, regulation rests on prudence and precaution. Manifest systemic risks include AI algorithms discriminating against vulnerable groups and perpetuating historical inequity, scaled fraud eroding trust, and new privacy invasions as AI infers sensitive data from public information. Technical fixes for bias are limited, and traditional privacy regulations are obsolete against AI's inferential power.

[p. 9] 56:545] SYSTEMIC REGULATION OF AI 553 to vulnerable communities, threats to economic and political stability, and, in a worst-case scenario, even existential risk.27 The potential benefits are significant as well, but neither the benefits nor the costs can be known with certainty at present. Hence, the case for regulation rests on the general principles of prudence in the face of the unknown: taking precautions, considering maximin scenarios, and ultimately advancing with care in the face of deep uncertainty and potentially irreversible, consequences.28 The Article proceeds in four Parts. In Part I, we start by considering the important categories of systemic AI risk that are...


Large Language Models (LLMs) as 'smart readers' can significantly simplify complex contracts, reducing length and improving readability to empower consumers against the 'no-reading problem.' While not flawless—sometimes misinterpreting legal terms or omitting information, thus not replacing lawyers—they offer a scalable solution for daily transactions. Arbel concludes these tools mark a significant improvement, potentially revolutionizing consumer contracting and necessitating a paradigm shift...

[p. 1] How Smart Are Smart Readers? LLMs and the Future of the No-Reading Problem Yonathan A. Arbel & Shmuel I. Becher Abstract. Large Language Models (LLMs) can be used to summarize and simplify complex texts. In this study, we investigate the extent to which state-of-the-art models can reliably operate as ‘smart readers’: applications that empower consumers to tackle lengthy, difficult-to-read, and inaccessible standard form contracts and privacy policies. Our analysis reveals that smart readers (1) reduce by 66.9% the length of contracts; (2) reduce reading time by 14:41 minutes (3) improve text readability by converting college-level texts to texts readable by fifth-grade students;...

Yonathan A. Arbel & Shmuel I. Becher, How Smart Are Smart Readers? LLMs and the Future of the No-Reading Problem, Cambridge Handbook on Emerging Issues at the Intersection of Commercial Law and Technology (2024).


Large language models (LLMs) as 'smart readers' can markedly reduce contract length and reading time, improving readability to a fifth-grade level without significant loss of essential information. However, he cautions that these tools are not flawless, sometimes miscommunicating legal terms or presenting errors. Thus, while they cannot replace lawyers, smart readers are effective for many daily transactions and signal a crucial need for a paradigm change in how contracts are approached.


His paper investigates the capability of Large Language Models (LLMs) to address the pervasive "no-reading problem" by simplifying complex contractual texts. The study assesses the effectiveness of this simplification through metrics such as text length, complexity, and readability, and also critically evaluates the quality of these simplifications by analyzing specific clauses from major companies like the Wall Street Journal, Airbnb, and Amazon.

[p. 4] ARBEL & BECHER HOW SMART ARE SMART READERS? 4/41 through non-technological means. If they cannot, however, regulation may be justified in relying on non-technological tools. To frame our analysis, we offer a brief background on smart readers and their relevance to the no-reading problem in Section II. In Section III, we describe our dataset and methodology. We present the results of our examination at the level of the entire agreement, comparing the complexity, length, readability, and quality of the legal documents before and after their simplification in Section IV. Then, in Section V, we shift the focus from the entire legal text to (eight) specific clauses, allowing for a more...


A central challenge in consumer contracts is the "no-reading problem," where consumers' failure to engage with standard forms undermines informed decision-making and reduces sellers' incentives for fair terms. He explains that this chapter evaluates whether "smart readers," technological tools employing large language models, can effectively address this issue by simplifying contractual texts, thereby testing if current models have already achieved a utility threshold sufficient to empower consumers.

[p. 3] ARBEL & BECHER HOW SMART ARE SMART READERS? 3/41 I. INTRODUCTION An organizing problem in consumer contracts is the no-reading problem.1 The common view in the scholarship is that consumers rarely read standard form contracts,2 and, therefore, their manifested assent to them is superficial.3 If consumers indeed do not read (let alone understand) the terms of their transactions, their ability to make informed decisions is doubtful, and sellers’ incentive to provide fair and efficient contract terms is undermined.4 This chapter evaluates whether smart readers—technological tools that use large language models (LLMs) to parse texts—can solve this problem and transform standard form...


His study examines how "smart readers" utilizing LLMs perform in simplifying legal documents by comparing complexity, length, readability, and quality before and after simplification, analyzing both entire agreements and specific clauses to tackle the "no-reading problem." He notes that while these smart readers significantly improve text difficulty and length and generally capture important aspects, they can struggle with certain clauses—sometimes understating, omitting, or providing incorrect information. Thus, they do not replace lawyers but offer a scalable solution for consumers.


Consumers often avoid reading form contracts because they are cognitively taxing and visually difficult, a situation that allows firms to implement a "HIDE" strategy using terms that are "Hardly Interpretable but Dependably Enforceable." He notes that in response, courts have sometimes imposed a "duty to read," while lawmakers have instituted numerous plain language laws aiming to improve contract readability and accessibility, though these traditional measures face challenges.

[p. 5] ARBEL & BECHER HOW SMART ARE SMART READERS? 5/41 reputational constraints, trust and social norms, and a (sometimes misguided) belief in the courts’ reluctance to enforce unreasonable terms.8 However, perhaps the most influential accounts relate to the writing itself. Consumer form contracts are cognitively taxing, visually difficult, and replete with blocks of off-putting ALL-CAPS while employing arcane terms, complex language, and difficult concepts.9 Consumers do not read contracts, in short, because reading them is a miserable experience.10 These challenges lead to a central problem in unregulated markets. Namely, if consumers do not read forms and the law generally allows them...


Large language models can be used to estimate contractual meaning in context, quantify ambiguity, and help adjudicators reason about extrinsic evidence at far lower cost than traditional approaches.

[p. 2] ARBEL & HOFFMAN Generative Interpretation Yonathan A. Arbel & David A. Hoffman* 99 N.Y.U. L. REV. __ (forthcoming 2024) [DRAFT October 27, 2023] We introduce generative interpretation, a new approach to estimating contractual meaning using large language models. As AI triumphalism is the order of the day, we proceed by way of grounded case studies, each illustrating the capabilities of these novel tools in distinct ways. Taking well-known contracts opinions, and sourcing the actual agreements that they adjudicated, we show that AI models can help factfinders ascertain ordinary meaning in context, quantify ambiguity, and fill gaps in parties’ agreements. We also illustrate how models...

Yonathan A. Arbel & David Hoffman, Generative Interpretation, NYU Law Review (2024).


Large Language Models (LLMs) introduce "Generative Interpretation," a paradigm shift in legal text analysis. This approach enables AI to parse contracts, identify ambiguities, and predict judicial outcomes, offering a potentially cheaper, more accurate, and accessible method than traditional textualism or contextualism. He posits that generative interpretation can resolve long-standing interpretive debates, enhance access to justice, and fundamentally re-equip legal theory for AI's role as an active interpretive agent in contract law.


Large Language Models (LLMs) can now interpret legal texts, a capability he terms "Generative Interpretation." This signifies a paradigm shift where AI becomes an active interpretive agent, a development for which current legal theory is unprepared. He introduces generative interpretation as a new approach using LLMs to estimate contractual meaning, ascertain ordinary meaning, quantify ambiguity, and fill gaps. This method aims to offer courts a cheaper, more accurate way to discern parties' intentions, potentially resolving the textualist-contextualist stalemate and providing a more accessible and transparent tool for contract analysis.


A Status Theory of Defamation Law argues that defamation law is best understood as protecting social status rather than only honor, dignity, or property. The paper uses that status account to explain defamation doctrine's architecture and to evaluate contemporary calls to expand or reshape defamation liability.

[p. 1] A Status Theory of Defamation Law Yonathan A. Arbel∗ Alabama Working Paper Series, 4021605, Comments welcome! Defamation law occupies a privileged position in our constitutional order. Despite grave First Amendment concerns, courts around the country routinely muzzle speech to protect good-name interests. Yet, to a growing movement of reformers, this protection is still too weak. With calls reverberating across the political spectrum—emanating from the President, the Supreme Court, scholars, and pundits—there is a growing pressure to reshape defamation law. In all of this, one crucial question remains unanswered: what is the purpose of defamation law? The most sustained attempts to...

Yonathan A. Arbel, A Status Theory of Defamation Law, UC Irvine Law Review (2024).


New technologies are enabling "nano contracts"—extremely small-scale agreements governing ephemeral, minuscule-value interactions previously outside formal law. While nano contracts can unlock new opportunities and efficiencies, they also carry significant risks, challenge effective regulation, could collapse private law boundaries, and reveal scale's neglected role in private law.

[p. 1] NANO CONTRACTS 11/14/2023 2:12 AM ON THE SCALES OF PRIVATE LAW: NANO CONTRACTS FORTHCOMING: 37 HARVARD JOURNAL OF LAW & TECHNOLOGY (2024) Yonathan A. Arbel Contracts are falling in scale. New contracting trends and technologies facilitate the formation of smaller scale contracts that have extremely short duration, stakes, and scope. These nano contracts embody ephemeral interactions of minuscule value interactions that were so far outside the law and away from explicit markets, governed only by social norms. The rise of nano contracts can unlock new transaction types, opportunities to build wealth, and reduce dependence on private ownership. Yet they also carry important risks, and...

Yonathan A. Arbel, On the Scales of Private Law: Nano Contracts, Harvard Journal of Law & Technology (2023).


New contracting trends and technologies are facilitating "nano contracts," extremely small-scale agreements for ephemeral, low-value interactions previously outside formal law. while these nano contracts offer new opportunities, they also carry significant risks, challenge effective regulation, and could ultimately collapse private law boundaries, revealing scale's neglected role in private law.


Writes to introduce the concept of nano contracts, exploring their fundamental aspects including platforms, protocols, and necessary legal technology. the paper then delves into specific applications like nano lines, nano leases, nano gigs, and nano accidents, examining the legal policy implications for each.


Writes that, drawing an analogy to Richard Feynman's call to explore nanotechnology, current technological trends demonstrate a dramatic miniaturization of contract scale. this changed, smaller scale of contracts has profound implications that his article will explore.

[p. 3] 2023] 𝑛𝐾 3 I. INTRODUCTION THERES PLENTY OF ROOM AT THE BOTTOM RICHARD FEYNMAN1 In the 1959 annual meeting of the American Physical Society, theoretical physicist Richard Feynman stood up and took the stage, set to deliver a puzzlingly titled after-dinner speech. 2 With his signature mischievous grin, Feynman sought to persuade a room of physicists that they should turn their gaze from the heavens above to the molecular level below. It is at the bottom the smallest scale of atomic interactions that we can find grand opportunities for innovation. In his inimitable style, he surgeon, 3 to be able to replace the heavy hand of the surgeon with a pill containing a nano robot that...


Scale transformations in contracts carry profound legal and social implications, holding both promise and peril if the legal response is inattentive. recent technological trends like digitization, XaaS models, and AI agents are creating the infrastructure for "nano contracts," characterized by near-zero latency and extremely low transaction costs.

[p. 4] 4 Draft[Vol. __ deep legal implications. What I will strive to show throughout is that scale transformations do more than change the commercial aspect of transactions, they also carry the seed of social transformation. Drawing on examples of past scale transformations in contracts, it will become clear that a fall in contract scale can lead to broad social, political, and material changes. But while the march of technology is likely inevitable, the social response is not. Some of the changes carry great promise, promoting greater autonomy, choice, and prosperity. Yet, if the legal response is inattentive, these changes can also imperil social values, marginalized communities, and...


Nano contracts are digitally negotiated, automated, near-instantaneous agreements for very small-scale peer-to-peer transactions involving tiny values or fragmented rights, reducing intermediaries. these nano contracts challenge classical contract law by blurring distinctions between contractual relationships and spot exchanges, as traditional assumptions about parties, negotiation, and value may not hold.

[p. 5] 2023] 𝑛𝐾 5 Nano contracts are digitally negotiated agreements that employ automated and near-instantaneous bargaining processes in multiparty peerto-peer ( p2p ) transactions. What makes them nano is their scale. They cover transactions that last a few seconds; transfer cents, milles, and even smaller fractions of the dollar;13 or transfer slivers and fragments of the bundle of rights of ownership. Their p2p character reduces the need for intermediation, and thus allows parties to transact with each other without necessarily involving firms or platforms in the middle. Two preliminary questions immediately present themselves. Is there anything truly new about these agreements if they...


Defamation with Bayesian Audiences analyzes how strictly law should regulate false defamatory statements when audiences update their beliefs in response to legal rules and judicial error. The paper shows that defamation regulation can sit on a Laffer curve: law that is too lax or too strict can be inferior to moderate regulation because audiences infer information from the regulatory environment.

[p. 2] J,V0N0 1 Defamation with Bayesian Audiences YonathanA.Arbel,* MuratC.Mungan† Howstrictlyshouldthelawregulatefalsedefamatorystatements? Wefirstshowthat thepresenceofjudicialerrorsoftenputsdefamationlawonaLaffercurve: regulation thatistoolaxortoostrictisinferiortomoderateregulation.Whilemoderateregulation is ideal, it is not always attainable, due to practical and legal constraints. With these constraints,thepresenceofBayesianaudiencescancausetheoptimalregulationtobe laxerthanisprescribedbystandardmodelswithna¨ıveaudiences.Thishighlightsthe importanceofaccountingfortheimpactofdefamationlawsonbeliefformation. Keywords:Defamation,Bayesianaudience,informationregulation,disclosure....

Yonathan A. Arbel & Murat C. Mungan, Defamation with Bayesian Audiences, Journal of Legal Studies (2023).


What does it mean to have machines that can read, explain, and evaluate contracts? Recent advances in machine learning have led to a fundamental breakthrough in machine language models, portending a profound shift in the ability of machines to process text. Such a shift has far-reaching consequences for diverse areas of law, which are predicated on, and justified by, the existence of information barriers. Our object here is to provide a general framework for evaluating the legal and policy...

[p. 1] \\jciprod01\productn\G\GWN\90-1\GWN102.txt unknown Seq: 1 17-FEB-22 12:20 Contracts in the Age of Smart Readers Yonathan A. Arbel* & Shmuel I. Becher** ABSTRACT What does it mean to have machines that can read, explain, and evaluate contracts? Recent advances in machine learning have led to a fundamental breakthrough in machine language models, portending a profound shift in the ability of machines to process text. Such a shift has far-reaching consequences for diverse areas of law, which are predicated on, and justified by, the existence of information barriers. Our object here is to provide a general framework for evaluating the legal and policy implications of employing language...

Yonathan A. Arbel & Shmuel I. Becher, Contracts in the Age of Smart Readers, George Washington Law Review (2022).


AI-powered "smart readers" represent a significant breakthrough in contract analysis, capable of simplifying, personalizing, and benchmarking terms for consumers. While offering profound benefits like increased understanding, improved market competition, and enhanced access to justice, these tools also introduce serious risks such as errors, bias, adversarial exploitation, and discrimination. Arbel calls for a new legal and regulatory framework to navigate these complex implications, as current doctrines are unprepared for this technological shift and its impact on contract law and consumer protection.

[p. 9] \\jciprod01\productn\G\GWN\90-1\GWN102.txt unknown Seq: 9 17-FEB-22 12:20 2022] CONTRACTS IN THE AGE OF SMART READERS 91 do not feel the risk of boilerplate is similar to “lay[ing one’s] head into the mouth of a lion.”27 Part III examines the social implications of smart readers. Even with limited adoption, smart readers can have broad market effects, plausibly jumpstarting term competition in dormant markets. But along with their many salutary effects, smart readers also carry significant risks. These include discrimination, bias, and errors—risks that further merit taking this technology seriously. One novel concern we address is that of adversarial attacks by sophisticated...


AI-powered "smart readers" are emerging from machine learning breakthroughs, poised to disrupt the "dismal equilibrium" where consumers ignore complex contract terms. these tools can simplify, personalize, interpret, and benchmark contracts, offering a technological solution to information barriers. His work explores their capabilities, potential uptake, and broad implications for contract law, including market competition, errors, access to justice, and discrimination, highlighting the need for new regulatory responses as current legal doctrines are unprepared for these advancements and their associated risks like bias and exploitation.


Smart readers, powered by AI like GPT-3, possess core capabilities crucial for consumer empowerment: simplification of complex legal text, personalization to individual user needs (including linguistic and cognitive adaptations), construction of contractual meaning through explanations, and benchmarking contracts against market alternatives. these tools can make obscure clauses understandable, provide scores for privacy policies, and allow interactive questioning, offering advantages in cost, speed, and accessibility over human lawyers, thereby helping consumers comprehend fine print and understand market choices.

[p. 35] \\jciprod01\productn\G\GWN\90-1\GWN102.txt unknown Seq: 35 17-FEB-22 12:20 2022] CONTRACTS IN THE AGE OF SMART READERS 117 terms, and there is little variety of policies in the market. Once consumers start using smart readers and particularly their benchmarking capabilities, firms might witness a change in market behavior. There would be some migration of consumers toward firms with better privacy policies, even if these policies are still far from what consumers desire. Importantly, smart readers do not need to be perfectly accurate for this to happen. Even if smart readers only give a general sense of which privacy policies are better, they might be effective. Once firms...


Consumer uptake of smart readers, while potentially limited by reading aversion and cognitive biases, could significantly impact markets even with modest adoption by an "informed minority," fostering term competition. these tools can act as behavioral nudges, countering cognitive overload by summarizing complex information, addressing myopia by highlighting risks like warranties, and helping consumers overcome price manipulations. The success or failure of uptake will offer insights into theories on why consumers don't read contracts, with quality, cost, and user experience being critical factors.

[p. 49] \\jciprod01\productn\G\GWN\90-1\GWN102.txt unknown Seq: 49 17-FEB-22 12:20 2022] CONTRACTS IN THE AGE OF SMART READERS 131 F. Nudging with Smart Readers Behavioral biases and cognitive constraints are said to undermine the ability of consumers to make prudent decisions.196 To counter some of these biases, behavioralists often recommend using various nudges that improve the decision-making environment.197 There are many different types of biases, and although smart readers do not address all of them, they do seem well poised to tackle a few major types. These include (1) cognitive overload, (2) myopia and risk discounting, and (3) price-related manipulations. Cognitive overload...


Smart readers carry significant risks, including errors (isolated or correlated), which must be evaluated against human error rates. more pernicious are adversarial attacks, where firms use subtle textual manipulations to mislead AI, and the potential for discrimination, as firms might offer inferior terms to non-users or leverage smart reader data for redlining. There's also a risk of overcompliance if smart readers don't distinguish unenforceable terms, and bias within the AI models themselves, necessitating caution despite their potential.

[p. 38] \\jciprod01\productn\G\GWN\90-1\GWN102.txt unknown Seq: 38 17-FEB-22 12:20 120 THE GEORGE WASHINGTON LAW REVIEW [Vol. 90:83 benchmarks today evaluate language models on performance in this domain. Based on our experience using the models, we expect a large degree of error in the near future and a nontrivial improvement within a relatively short time. Critically, smart readers are useful even if they are not as accurate as their human counterparts, so long as they have a cost, consistency, and accessibility advantage over the alternatives. We already noted how, despite the potential for occasional error, firms stake billions of dollars on investment analyses produced by smart...


A small group of hyper-persistent consumers, dubbed "nudniks," play a crucial role in market discipline by actively challenging seller misconduct, benefiting all consumers. However, sellers increasingly use big data to identify and neutralize these nudniks, undermining accountability. Arbel calls for legal strategies to protect this vital "nudnik-based activism" and preserve its positive spillovers, shifting focus from mythical contract-readers to these real-world enforcers of market norms.

[p. 2] 1_Arbel Shapira (Do Not Delete) 5/12/2020 5:51 PM 930 VANDERBILT LAW REVIEW [Vol. 74:4:929 can solve consumer collective action problems, leading to broad market improvements. Second, the Article spotlights a disconcerting development: sellers’ growing usage of big data and predictive analytics allows them to identify specific consumers as potential nudniks and then disarm or avoid selling to them before they can draw attention to sellers’ misconduct. The Article therefore captures an understudied problem with big data tools: sellers can use these tools to shield themselves from market accountability. Finally, the Article evaluates a menu of legal strategies that would preserve the...

Yonathan A. Arbel & Roy Shapira, Theory of the Nudnik: The Future of Consumer Activism and What We Can Do to Stop It, Vanderbilt Law Review (2020).


"nudniks" are hyper-persistent consumers with idiosyncratic utility functions who challenge seller misconduct *ex post*, even when costs outweigh benefits, acting where most remain passive.

[p. 1] 1_Arbel Shapira (Do Not Delete) 5/12/2020 5:51 PM VANDERBILT LAW REVIEW VOLUME 73 MAY 2020 NUMBER 4 ARTICLES Theory of the Nudnik: The Future of Consumer Activism and What We Can Do to Stop It Yonathan A. Arbel* Roy Shapira** How do consumers hold sellers accountable and enforce market norms? This Article contributes to our understanding of consumer markets in three ways. First, the Article identifies the role of a small subset of consumers—the titular “nudniks”—as engines of market discipline. Nudniks are those who call to complain, speak with managers, post online reviews, and file lawsuits. Typified by an idiosyncratic utility function and certain unique personality traits,...


Distinct from passive consumers or pre-purchase focused "shoppers," nudniks are driven by fairness, spite, or ideology, often being derided despite their crucial role.

[p. 3] 1_Arbel Shapira (Do Not Delete) 5/12/2020 5:51 PM 2020] THEORY OF THE NUDNIK 931 D. On Optimizing (Rather than Maximizing) Nudnik Behavior ................................................................... 985 CONCLUSION ................................................................................... 986 INTRODUCTION Can consumers hold sellers accountable and enforce market norms? This Article spotlights the disciplinary power of a small subset of consumers, who we dub “nudniks.”1 Nudniks are those consumers who call to complain, complete satisfaction surveys, demand to speak with managers, post detailed online reviews, and file lawsuits. They usually have an innate sense of...


Nudniks act as engines of market discipline, generating positive spillovers by publicly airing grievances, litigating, and creating reviews, thus deterring unfair practices and enforcing market norms benefiting all.


Their actions solve collective action problems, provide monitoring for sellers, and can compel broad policy changes, enhancing both legal and reputational deterrence for the passive majority.


Firms leverage detailed consumer data to predict complaint likelihood and then disarm nudniks through tailored remedies, by muffling their voices, or by avoiding or "gagging" them.

[p. 37] 1_Arbel Shapira (Do Not Delete) 5/12/2020 5:51 PM 2020] THEORY OF THE NUDNIK 965 These emerging technological capabilities allow firms not just to identify nudniks early but also to disarm them effectively, an issue that we turn to now. 2. Disarming Nudniks A seller who identifies a nudnik would want to minimize the nudnik’s impact as quickly as possible.149 Sellers have always employed a wide array of disarming tactics, such as settling outside the courthouse, delivering private apologies,150 or offering complimentary services.151 But here as well, big data and predictive analytics are transforming nudnik-disarming tactics. They are doing so along three key dimensions: selective...


Slicing Defamation by Contract is a short essay at the intersection of defamation, speech, and private ordering. The current corpus extraction for this paper is incomplete and comment-heavy, so this record is intentionally conservative: use it as a pointer to the paper page and PDF, not as a source for detailed claim extraction until the text is repaired.

[p. 1] SLICING DEFAMATION BY CONTRACT  DIVISION AND AGGREGATION IN LAW AND LIFE (2019)  [p. 2] 2 Chicago Law Review Online 2020 and Cheap Talk, J. LEG. ANALYSIS (Forthcoming, 2019); Yonathan A. Arbel and Murat Mungan, The Case Against Expanding Defamation Laws, ALABAMA L. REV. (Forthcoming, 2019); Yonathan A. Arbel & Murat Mungan, Regulating Speech with Bayesian Audiences, Alabama Working Paper 3452662 (2019). [p. 3] [p. 4] 4 Chicago Law Review Online 2020 [p. 5] [p. 6] 6 Chicago Law Review Online 2020 [p. 7] [p. 8] 8 Chicago Law Review Online 2020 256 (1893) [p. 9] [p. 10] 10 Chicago Law Review Online 2020 [p. 11]

Yonathan A. Arbel, Slicing Defamation by Contract, Chicago Law Review Online (2020).


[p. 1] W03_ARBEL_GRAPHICS_REVISED.DOCX (DO NOT DELETE) 1/30/20 11:10 AM REPUTATION FAILURE: THE LIMITS OF MARKET DISCIPLINE IN CONSUMER MARKETS Yonathan A. Arbel* Many believe that consumer-sourced reputational information about products should increasingly replace topdown regulation. Instead of protecting consumers through coercive laws, reputational information gleaned from the wisdom of the crowd would guide consumer decision-making. There is now a growing pressure to deregulate in diverse...

[p. 1] W03_ARBEL_GRAPHICS_REVISED.DOCX (DO NOT DELETE) 1/30/20 11:10 AM REPUTATION FAILURE: THE LIMITS OF MARKET DISCIPLINE IN CONSUMER MARKETS Yonathan A. Arbel* Many believe that consumer-sourced reputational information about products should increasingly replace topdown regulation. Instead of protecting consumers through coercive laws, reputational information gleaned from the wisdom of the crowd would guide consumer decision-making. There is now a growing pressure to deregulate in diverse fields such as contracts, products liability, consumer protection, and occupational licensing. This Article presents a common failure mode of systems of reputation: “Reputation Failure.” By...

Yonathan A. Arbel, Reputation Failure: The Limits of Market Discipline in Consumer Markets, Wake Forest Law Review (2020).


Consumer-sourced reputation systems, widely believed to replace formal regulation, suffer from inherent "Reputation Failure." Due to the public-good nature of reviews and misaligned incentives, these systems produce systematically distorted information (e.g., sluggishness, extreme reviews). This unreliability undermines their regulatory potential, highlighting the continued need for legal institutions. Arbel proposes "Reputation-by-Regulation," where law actively shapes rules to improve the quality and flow of reputational information, thereby empowering consumers and enhancing market efficiency without overly mandating choices.


The Inadequacy of Unregulated Reputation and Call for Intervention: consumers struggle with the scale of qualitative review analysis and detecting sophisticated fakes; any heuristics they develop are exploitable. Distorted peer-to-peer information leads to "reputation failures," undermining arguments for deregulation by causing persistent consumer mistakes and negative market dynamics akin to a "lemon market." Modern deregulation debates often overlook these systematic failures, highlighting the need for legal interventions to facilitate quality reputational information and temper unjustified deregulatory trends.

[p. 48] W03_ARBEL_GRAPHICS_REVISED.DOCX (DO NOT DELETE) 1/30/20 11:10 AM 1286 WAKE FOREST LAW REVIEW [Vol. 54 extreme, and integrity bias. As a result, peer-to-peer reputational information tends to provide a false sense of the true quality of the underlying product. While consumers can try to account for these distortions, many will lack the requisite sophistication, and even consumers who do account for the distortions might not be able to do so given the potentially corrupting effect of the distortions. This is not to say that distortions are always strong or that consumer heuristics are not helpful. Still, reputation failures have important normative implications which I now move to...


Introducing "Reputation-by-Regulation" and Addressing Platform Issues: law can actively design rules ex ante to make market information more reliable and abundant through "Reputation-by-Regulation," where legal institutions influence reputation. While platforms like Amazon act as metaregulators, their policing is limited by contractual reliance and conflicts of interest. Platforms may lack incentives to act in the public interest, potentially manipulating markets or censoring reviews (as alleged against Uber, Yelp, Amazon), a problem worsened by court rulings granting them broad curatorial discretion over user-generated content.

[p. 52] W03_ARBEL_GRAPHICS_REVISED.DOCX (DO NOT DELETE) 1/30/20 11:10 AM 1290 WAKE FOREST LAW REVIEW [Vol. 54 To the extent that such systems work, they are desirable and helpful. But reputational platforms are also limited in their policing powers. For the most part, platforms only rely on contractual agreements between themselves, sellers, and buyers.266 Thus, their ability to investigate and sanction fake reviews is very limited. Platforms also risk harmful public relations implications if they take actions that consumers deem too aggressive.267 Moreover, platforms’ ability to correct consumer misstatements, investigate cherrypicking, or validate information is also limited. There is...


Information regulation often overlooks how audiences adjust their beliefs and actions based on the strictness of laws governing statement veracity. His research aims to address this "audience gap" by using a Bayesian game to model interactions between speakers, targets, and audiences, particularly examining how legal strictness impacts their behavior and the resulting information landscape.

public(Heymann, 2012). Whateverthereason,regulationoftheinformationenvironment—theflowand qualityofinformationtothepublic—affectsaudiencesandtheirbeliefsquite directly. Ourobjecthereistobridgetheaudiencegapbyformalizingtheinteraction betweenspeakers,thetargetsoftheirspeech,andmembersoftheaudience.We employatoolthatisnaturallyaptatanalyzingthisissue,namely,aBayesian game,andweinvestigatetheimpactofthestrictnessofthelawontheemergingPerfectBayesianEquilibria(PBE).Underthisframework,aspeaker,who has private information about a business or individual (“target”), may make Draft,Vol.0,No.0, doi:/ewmxxx (cid:13)c . Allrightsreserved.ForPermissions,pleaseemail: 2 .V0N0 claims about the target to an...

Yonathan A. Arbel & Murat C. Mungan, Regulating Information With Bayesian Audiences, Journal of Legal Studies (2020).


The common approach to regulating information exchange has a significant blind spot: it often fails to account for the dynamic ways in which audiences adapt. Specifically, how audiences adjust their beliefs and subsequent actions is directly influenced by the perceived strictness of the laws that govern the truthfulness of statements. This oversight can lead to miscalibrated regulations.

ulstatements.Whencourtsarelesscapableof accuratelyadjudicatingstatements,thesocialcostofusingthecourtsystem— operationalizedbylitigationcosts—iskeyindeterminingwhetherinformation shouldberegulated.Eveninthesecases,whenthegainsfromfacilitatingbeneficialinteractionsanddeterringharmfulonesdwarfslitigationcosts,moderate damagesemergeastheoptimalchoice.2 Anotherimplicationpertainstothepotentialdynamicimpactofinformation regulating laws. Specifically, moderate laws that cause the audience to rationally rely on speakers’ statements broadens the gap between the frequency withwhichtheaudienceinteractswithgoodtypesversusbadtypes.Thisnaturally increases the returns from being a good versus a bad...


Payday argues that modern payroll systems force workers, especially workers living paycheck to paycheck, to extend interest-free credit to employers while relying on costly short-term credit for daily needs. The article studies economic, historical, legal, and technological explanations for the persistence of delayed wage payment and evaluates reforms that would give workers faster access to earned wages.

[p. 1] PAYDAY 6/2/2020 6:22 PM PAYDAY FORTHCOMING: 98 WASH. U. L. REV. 1 (2020) Draft: Comments, Suggestions, and Critique Welcome! Yonathan A. Arbel Legislation lags behind technology all too often. While trillions of dollars are exchanged in online transactions—safely, cheaply, and instantaneously—workers still must wait two weeks to a month to receive payments from their employers. In the modern economy, workers are effectively lending money to their employers, as they wait for earned wages to be paid. The same worker who taps a credit card to pay for groceries in semi-automated checkout lines depends on dated payroll systems that only transfer payments on a “payday.” Workers,...

Yonathan A. Arbel, Payday, Washington University Law Review (2020).


Traditional consumer protection, thought to rely on an "informed minority" reading contracts, is ineffective. Instead, a new type of activist, the "nudnik" or "crusading minority," drives market discipline. Motivated by moral outrage and a sense of justice rather than contract details, nudniks use public shaming, complaints, and lawsuits to punish firms for perceived wrongdoings. These actions create broad benefits, making nudniks the "unsung heroes" of consumer markets, even if their...

[p. 3] \\jciprod01\productn\D\DPL\69-2\DPL206.txt unknown Seq: 2 21-APR-20 11:48 234 DEPAUL LAW REVIEW [Vol.69:233 then, may explain bottom-up governance in a world where consumers do not read contracts? In this contribution to the Clifford Symposium, we aim at exposing a different mechanism of market discipline: one that works not through ex ante reading and negotiating, but rather through ex post pressures to meet buyers’ expectations. We specifically emphasize the role of a small subset of consumers that we dub “nudniks.” Nudniks are those consumers who call in to complain, fill out satisfaction surveys, post online reviews, and file lawsuits. Driven by an innate sense of justice and...

Yonathan A. Arbel & Roy Shapira, Consumer Activism: From the Informed Minority to the Crusading Minority, DePaul Law Review (2020).


The long-held "informed minority theory," suggesting a few knowledgeable consumers discipline markets by reading contracts, is unrealistic and empirically challenged. He notes consumers are often rationally apathetic or unable to understand complex terms, leading to passivity. Furthermore, theories of reputational discipline through online reviews are criticized as underspecified, failing to explain how credible information is produced or disseminated, and often relying on biased or low-participation data. These traditional models inadequately explain consumer power in modern markets, prompting a search for alternative explanations.


A new "crusading minority," termed "nudniks," is emerging as a key force in consumer governance. Unlike the supposed "informed minority," nudniks are motivated less by informing others and more by moral outrage, seeking to punish firms for perceived wrongdoings. They operate *ex post*, reacting to disappointments through complaints, reviews, and litigation, often leveraging the internet. This nudnik-driven activism challenges traditional theories by suggesting that consumer power can be effective even when consumers don't read contracts, as sellers are incentivized to improve quality for all to avoid public disputes.

[p. 4] \\jciprod01\productn\D\DPL\69-2\DPL206.txt unknown Seq: 3 21-APR-20 11:48 2020] CONSUMER ACTIVISM 235 theory’s progenitors now seem to question its practicality.5 This has left a gap in our understanding of market discipline through consumer governance: If market discipline does not come from a critical mass of informed readers, where does it come from? This Essay suggests looking elsewhere: Instead of focusing on buyers who read and negotiate before the purchase, focus on buyers who feel compelled to respond strongly whenever sellers disappoint. Instead of focusing on avid readers, focus on avid “enforcers”—those consumers who demand to speak with the manager, fill out satisfaction...


"nudniks"—consumers highly prone to vindicating their rights—are distinct from other archetypes. "Passivists," the largest group, are largely inactive. "Shoppers" meticulously compare terms *ex ante* and primarily "exit" to competitors. "Sophisticates" strategically leverage contract terms for personal profit based on cost-benefit analysis. In contrast, nudniks act *ex post* out of principle or moral outrage, often when others would not, and their actions are more likely to generate positive spillovers for all consumers, whereas sophisticates primarily seek private gains that may not benefit, or could even harm, others.

[p. 16] \\jciprod01\productn\D\DPL\69-2\DPL206.txt unknown Seq: 15 21-APR-20 11:48 2020] CONSUMER ACTIVISM 247 efit analysis. But if one sees the nudnik’s preferences as consisting of broader concerns, from spite to altruism to all other human motivations that are in-between, then labeling his actions irrational no longer fits. For our purposes, it is immaterial what label one gives to their behavior, so long as it is clear that nudniks defy the standard account of rational apathy. Nudniks are not the only type of active consumers. “Shoppers” present another category:54 those consumers that the informed minority theory envisions, who shop around, read contracts, and compare among products...


Nudniks are driven by an innate sense of justice or idiosyncratic motivations, leading them to act even when costs seem to outweigh benefits for an average consumer. They employ tactics like complaints, reviews, lawsuits, and viral social media campaigns (e.g., "United Breaks Guitars") to highlight seller failures. This activism, based on broad transactional expectations rather than specific contract terms, can be initiated by a single individual and amplified by social media. Sellers respond due to legal and reputational risks, often improving service for all, making nudniks effective at solving collective action problems.


While nudnik activism is potent, it's not without concerns. Critics question if complaints are always representative or beneficial, potentially being frivolous or driven by unrealistic expectations. However, he argues these issues may be overstated. Nudniks are a heterogeneous group, and their actions, even if driven by "spite," often highlight genuine consumer interests and can lead to market-wide improvements. The impact of unrepresentative nudniks is also mitigated as other consumers tend to amplify only those grievances they find valid, and sellers actively manage expectations.

[p. 34] \\jciprod01\productn\D\DPL\69-2\DPL206.txt unknown Seq: 33 21-APR-20 11:48 2020] CONSUMER ACTIVISM 265 past issues. Again, this stylized fact of consumer complaining behavior suggests a positive dynamic: It is not that serial complainers are only after making a seller’s life miserable. If consumers perceive the seller as making a genuine effort to satisfy their expectations, they will pay the seller back by continuously purchasing from her. To reiterate, we acknowledge that we cannot offer here conclusive proof on the representativeness of nudniks’ expectations, or the ratio of valid-to-frivolous complaints. Still, these findings are at least suggestive that nudniks’ interests are...


A hallmark of consumer contracts is long blocks of capitalized text. Courts and legislators believe that such “all-caps” clauses improve the quality of consumer consent and thus they will often require the capitalization of certain key terms in consumer contracts. Some of the most important terms in consumer contracts—warranty disclaimers, liability releases, arbitration clauses, and automatic subscriptions—will be enforced only because they appeared in all-caps in the contract. This Article...

[p. 1] ALL-CAPS ALL-CAPS YONATHAN A. ARBEL & ANDREW TOLER* Alabama Working Paper Series, 3519630 ABSTRACT A hallmark of consumer contracts is long blocks of capitalized text. Courts and legislators believe that such “all-caps” clauses improve the quality of consumer consent and thus they will often require the capitalization of certain key terms in consumer contracts. Some of the most important terms in consumer contracts—warranty disclaimers, liability releases, arbitration clauses, and automatic subscriptions—will be enforced only because they appeared in all-caps in the contract. This Article is the first to empirically examine the effectiveness of allcaps with respect to the quality of...

Yonathan A. Arbel, ALL-CAPS, Journal of Empirical Legal Studies (2020).


The widespread legal practice of using all-caps in consumer contracts to ensure key terms are conspicuous and consent is improved is deeply flawed. His empirical research demonstrates that all-caps text fails to enhance consumer understanding, provides no benefits for most readers, and significantly harms the comprehension of older individuals. Arbel calls for abandoning this unsubstantiated tradition and exploring more effective disclosure methods.

[p. 53] 2019] ALL-CAPS [DRAFT] 53 The findings here are relevant to both sides of this debate. The failure of all-caps, the most prominent form of smart disclosure, supports skepticism about the meaning of consent to the fine print. The conspicuousness policy is built on the idea that it is possible to avert or mitigate some of the noreading problem by highlighting key terms. The consumer would read more, it is thought, if reading was made accessible. In practice, however, reading of all-caps seemingly takes longer, the subjective feeling of understanding falls, and recall does not improve over standard print and actually falls for older readers. If a leading form of smart disclosure is...


Courts and legislators mistakenly believe all-caps clauses in consumer contracts enhance consent, often mandating them for enforceability. He asserts this practice is a deeply misguided instance of "contract lore," an ungrounded belief among lawyers, especially problematic given consumers often don't read fine print. Arbel argues that if all-caps doesn't improve consent, or worsens it, courts may be wrongly enforcing harsh terms based on an illusion of understanding, depriving consumers of recourse. This legal tradition lacks empirical support for its effectiveness.

[p. 56] 56 ALL-CAPS [DRAFT] [VOL. --- VI. CONCLUSION An old anecdote tells of Niels Bohr, the Nobel-winning physicist, whose door was adorned by a horseshoe. When asked by an incredulous guest whether he believed in such superstition, Bohr replied that “I’ve been told that it works even if you don’t believe in it.”148 This study explores the common practice of using all-caps in consumer contracts and finds that the belief in their power borders on the superstitious. Courts and legislators endorse this practice as a means of improving consumer consent, given the lack of attention consumers pay to the fine print. In reality, however, all-caps relies on no empirical support and the evidence...


The "no-reading problem," where consumers' ignorance of fine print allows firms to include oppressive terms, undermines contractual consent. A common solution adopted by courts and legislators, such as the UCC's requirement for conspicuous warranty waivers, is to mandate the prominent display of important terms. This strategy aims to improve consumer consent by signaling the importance of key provisions and making them more accessible, with all-caps being a widely endorsed method to achieve such conspicuousness and thereby enhance enforceability.

[p. 4] 4 ALL-CAPS [DRAFT] [VOL. --- are deeply problematic, as hidden terms pull the consent rug from under the contracting parties’ feet.5 A common solution to the no-reading problem is to require the conspicuous display of important terms. If consumers do not read the fine print, the solution is to make the print less fine.6 Making text conspicuous is believed to increase the quality of consumer consent by signaling the importance of the underlying text,7 and by making it more accessible.8 Most famously, the UCC requires that warranty waivers “must be by a writing and conspicuous.”9 The UCC is joined by a legion of other statutes, which incentivize the conspicuous display of information...


The legal convention of using all-caps to denote consent lacks empirical support; early psychological studies indicating it impeded reading were overlooked. His new research analyzing 500 popular consumer contracts from highly visited websites like Google and Amazon reveals its pervasiveness, with over 77% containing at least one fully capitalized paragraph and 9% of all words capitalized. This prevalence in contracts affecting most American adults is troubling, as the policy is based on speculation rather than evidence of its actual effectiveness.

[p. 7] 2019] ALL-CAPS [DRAFT] 7 consent, but this belief is not based on any hard evidence. In fact, the limited evidence that existed when this practice adopted was mostly negative. In particular, psychologists started investigating the effects of different typefaces in the 1930s, and found in a series of studies that it impedes reading speed.18 Admittedly, these studies are limited; partly because they are dated and did not explore legal texts. And partly because the focus on reading speed may have some positive effects, as it may theoretically invite more careful deliberation. Still, that was the best empirical evidence in existence, and legal doctrine overlooked it. The doctrine also...


Experimental Findings: All-Caps Fails to Improve Consent and Harms Older Readers


Expanding defamation law is misguided. He contends that such expansions overlook crucial "audience effects," where stricter laws can paradoxically harm reputations by making any remaining false statements appear more credible. This increased believability means attempts to fight "fake news" by strengthening defamation law could backfire. Arbel challenges the fundamental assumption that defamation law inherently protects reputation, suggesting it can even undermine it by altering how audiences...

[p. 6] 4 ARBELMUNGAN 453-497 (DO NOT DELETE) 12/4/2019 7:18 PM 458 ALABAMA LAW REVIEW [Vol. 71:2:453 ful. But it can have negative and deleterious effects when the occasional statement proves to be false, as audiences are more likely to believe it to be true than they would absent strict defamation law.20 Hence, we conclude that strict defamation law may damage reputational interests. The framework presented here offers another dimension to standard analyses of defamation law.21 In the standard bilateral-tort model, courts and commentators see expansions to defamation law as involving a simple balance between better protection of the victim’s reputation and the chilling effect of such laws...

Yonathan A. Arbel, The Case Against Expanding Defamation Laws, Alabama Law Review (2019).


His co-authored article, "The Case Against Expanding Defamation Law," examines the objectives and workings of defamation law, its relationship with reputation, and, critically, how "audience effects"—the way audiences perceive statements—shape the law's effectiveness and its appropriate boundaries.

[p. 2] 4 ARBELMUNGAN 453-497 (DO NOT DELETE) 12/4/2019 7:18 PM THE CASE AGAINST EXPANDING DEFAMATION LAW Yonathan A. Arbel & Murat Mungan* It is considered axiomatic that defamation law protects reputation. This proposition—commonsensical, pervasive, and influential—is faulty. Underlying this fallacy is the failure to appreciate audience effects: the interaction between defamation law and members of the audience. Defamation law seeks to affect the behavior of speakers by making them bear a cost for spreading untruthful information. Invariably, however, the law will also affect members of the audience, as statements made in a highly regulated environment tend to appear more reliable than...


The widely held belief that defamation law safeguards reputation is flawed because it ignores "audience effects"—how the law shapes audience perception. He argues that stricter defamation laws can paradoxically damage reputations by making statements seem more reliable, implying that expanding these laws to combat fake news could prove counterproductive.


Concurrent political pressures to bolster libel laws, exemplified by figures like then-President Trump, and a new American Law Institute project on defamation, signal potentially imminent, significant changes to the law. He notes these calls for expansion, involving reduced safeguards and higher damages, are largely based on the prevailing theory that defamation law's primary function is reputation protection.

[p. 3] 4 ARBELMUNGAN 453-497 (DO NOT DELETE) 12/4/2019 7:18 PM 2019] The Case Against Expanding Defamation Law 455 of his public communications, and he promised decisive action: “We are going to take a strong look at our country’s libel laws, so that when somebody says something that is false and defamatory about someone, that person will have meaningful recourse in our courts . . . .”4 At the same time, in January of 2019, the American Law Institute (ALI) announced the start of a new Restatement project for defamation law.5 The confluence of political will, support on the Supreme Court, and the ALI project suggests that, indeed, writers and critics who prophesize with their pens should...


The prevalent "reputation-protection theory" suggests stricter defamation laws, by penalizing falsehoods, protect reputations from damaging comments. His article, however, critiques this theory, highlighting its failure to account for significant "audience effects" – how the audience's perception of statements is influenced by the legal framework itself.


Traditional defamation law is deficient as it neglects the "audience effect," meaning harm isn't direct but mediated by third-party perception of negative statements. Applying signaling theory, he explains that stricter defamation laws can enhance the perceived reliability of statements, because the higher cost of falsehoods (due to increased legal risk) makes these "signals" appear more credible than "cheap talk."

[p. 5] 4 ARBELMUNGAN 453-497 (DO NOT DELETE) 12/4/2019 7:18 PM 2019] The Case Against Expanding Defamation Law 457 traditional torts, such as assault and battery, reputational harms are not immediate. Rather, they are mediated by third parties, namely, the audience.14 Reputational harm is the result of the audience believing, at least to some extent, in a negative statement. As a result, any legal analysis of defamation is incomplete without considering audience effect. As communication theorists agree, audience effects can be complex: “The modern view, informed by decades of empirical research, supports an understanding antithetical to the assumption of direct and uniform effects [of...


While Professor Croley's *Civil Justice Reconsidered* aptly describes the civil justice crisis of cost and inaccessibility, its diagnosis of under-participation by meritorious plaintiffs is not empirically proven and its reliance on win rates is misleading. Arbel contends Croley's proposed reforms, like increasing case volume, would overwhelm the system, especially concerning the neglected crisis in debt collection. He also critiques Croley's tort reform ideas and civil "Gideon" proposal,...

[p. 8] 2018] Review: Civil Justice Reconsidered 515 ideas like the class defense mechanism.10 A recent proposal in this area is the so-called Adminization of certain legal processes, whereby a governmental agency (such as the Federal Trade Commission) randomly samples cases that were filed in state courts and audits them, levying fines where wrongdoing is detected.11 This approach adds a cost-effective layer of consumer protection, that works well independent of consumers’ participation gap. Even the cases that are not audited would benefit from Adminization, because plaintiffs would be overall more hesitant to engage in abuse if there is a risk of audit and fines. But what is most...

Yonathan A. Arbel, Book Review: Civil Justice, Civil Justice Quarterly (2018).


Writes about his "Adminization" proposal, where a governmental agency audits court cases and levies fines, creating cost-effective, scalable consumer protection. He observes that tort reform has shapeshifted, with strategies like apology laws acting as covert reform. While Croley's tort reform proposals are sensible, Arbel argues they don't address new frontiers like tortfeasors using strategic apologies. Finally, he suggests Croley's recommendation for a civil "Gideon" right, mandating subsidized lawyering for indigent plaintiffs, may prove counter-productive.

emic effort to lobby for apology laws—laws that make apologies inadmissible at trial—led to legislative changes in most US states, Republican and Democratic alike. In reality, it was recently argued, these apology laws are covert tort reform, as they allow 10 A. Hamdani and A. Klement, “The Class Defense” (2005) 93 California Law Review 685. 11 Arbel, “Adminization: Gatekeeping Consumer Contracts” (2018) 71 Vanderbilt Law Review 121. [p. 9] 516 Civil Justice Quarterly [Vol. 37] tortfeasors to escape substantial liability with bespoke, strategic apologies.12 Croley’s proposals are centered on traditional tort reform efforts and so would do relatively little to address these new frontiers....


The current consumer debt litigation system is failing due to prevalent unmeritorious claims and consumer inability to defend themselves. He proposes "Adminization," where an administrative agency acts as a cost-effective gatekeeper, using sampling and AI to audit lawsuits and levy large fines against those filing baseless claims. This aims to deter abuse, enhance judicial efficiency, and provide meaningful oversight, offering a more just and economically viable solution than existing...

[p. 1] Arbel_Galley (Do Not Delete) 1/2/2018 4:17 PM Adminization: Gatekeeping Consumer Contracts Yonathan A. Arbel* Large companies and debt collectors frequently file unmeritorious claims against consumers. Recent high-profile actions brought by the Consumer Financial Protection Bureau against J.P. Morgan, Citibank, and other large debt collectors illustrate the breadth and importance of this phenomenon. Due to the limited financial power of individuals, consumers often do not defend against such baseless claims, which results in the entry of millions of default judgments every year. To combat this problem, policymakers and scholars have explored a variety of court-based solutions that...

Yonathan A. Arbel, Adminization: Gatekeeping Consumer Contracts, Vanderbilt Law Review (2018).


Because large companies and debt collectors file numerous unmeritorious claims against consumers who lack resources to defend themselves, leading to millions of default judgments and rendering courts ineffective, he proposes "Adminization"—an administrative agency acting as a cost-effective gatekeeper that samples cases and levies large fines for baseless claims to deter such wrongful behavior.


An introductory anecdote about Margaret Donnelly, an elderly widow facing severe legal repercussions for a small, unnotified debt, illustrates a systemic problem where vulnerable individuals are caught off-guard by consumer credit legal actions, highlighting a fundamental flaw in the justice process for these cases.

[p. 46] Arbel_Galley(Do Not Delete) 1/2/2018 4:17 PM 166 VANDERBILT LAW REVIEW [Vol. 71:1:121 require a higher bar of evidence in all eight million consumer credit cases. Other types of proposals offer conflicting recommendations on the choice of venue. While in the past small claims courts have been proposed as a solution, today some call for the transfer of cases to the general civil courts, where a higher standard of proof might deter creditors from filing.192 But this is similar to requiring more evidence, and, as just argued, more evidence is unlikely to be the solution to the problem. Others suggest that federal courts will provide a better solution, due to their fee-shifting...


A significant crisis exists with millions of consumers facing abusive debt collection lawsuits, many lacking merit or concerning already settled debts, particularly targeting those unable to afford legal representation; this is worsened by consumer difficulties in accessing courts, resulting in numerous default judgments with minimal judicial oversight.

[p. 3] Arbel_Galley(Do Not Delete) 1/2/2018 4:17 PM 2018] ADMINIZATION 123 Admittedly, even if she had, there was little she could do, as hiring a lawyer would overextend her budget. This is despite the fact that the case had no merit whatsoever: the debt was paid in full many years ago and, in any event, no evidence was brought to support the claim.3 Worryingly, the lawsuit was part of a pattern of abusive lawsuits filed by a local law firm that targeted over one hundred thousand consumers, a practice facilitated by the difficulty consumers like Ms. Donnelley face in accessing the courts and challenging these unmeritorious lawsuits.4 A large body of evidence shows that millions of others...


The current system for consumer debt disputes is broken, evidenced by penalties against financial institutions for filing false affidavits and pursuing fraudulent debts; to combat this, he proposes "Adminization," where a gatekeeper administrative agency would audit a sample of debt collection cases pre-litigation and issue large fines for fraud, deterring wrongful behavior.

[p. 4] Arbel_Galley(Do Not Delete) 1/2/2018 4:17 PM 124 VANDERBILT LAW REVIEW [Vol. 71:1:121 affiliates were ordered to pay $11 million and forego the collection of $34 million in consumer debt for the filing of false affidavits which misstated both the size of the debt and its age.11 J.P. Morgan Chase reached a $136 million settlement for its role in selling debts that were legally uncollectable to debt buyers.12 The Consumer Financial Protection Bureau (“CFPB”) also recently took action against a large debt buyer who was ordered to pay over $2.5 million for its attempt to knowingly collect on “fraudulent debts, debts that consumers had paid or settled, and debts that were so old that...


Under his proposal, consumer protection agencies would be notified of all incoming lawsuits, using administrative powers to audit a small fraction and fine abusers. Case selection would initially be random to ensure all creditors face potential detection, similar to IRS practices, but could later be enhanced by machine learning to target statistically high-risk cases.

[p. 5] Arbel_Galley(Do Not Delete) 1/2/2018 4:17 PM 2018] ADMINIZATION 125 consumer protection agencies (the Federal Trade Commission (“FTC”) or the CFPB); state attorney general offices and state level consumer agencies; or some combination thereof.16 More important than the institutional locus is the process itself. In a nutshell, the agency would be notified of every incoming lawsuit.17 Using its administrative powers, the agency will select claims to be audited by competent agency investigators; where wrongdoing and abuse are found, the agency will use its statutory powers to levy fines against wrongdoers.18 To manage the millions of cases that are filed every year, the agency will...


Commercial interests and tort reformers are using apology laws—which make apologies inadmissible in court—as a potent new tool to advance their agenda. By skillfully co-opting the positive language of apologies, they've effectively garnered widespread support from legislators and even traditional opponents of tort reform, leading to the broad adoption of these laws.

of tort reform dispute this basic premise; they worry that limitations on liability would unduly deprive accident victims of muchneeded compensation and would encourage negligent and reckless behavior. The political pendulum slowly swings between these two positions. In recent years, tort reformers have found a new and powerful platform to advance their position, one that allowed them to strike a major victory in their war against what they perceive as excessive liability. Apology laws; laws designed to privilege apologies made by injurers, making them inadmissible at trial. By co-opting the rhetoric and discourse on apologies and the law-----independently developed by ethicists, dispute...

Yonathan A. Arbel, Tort Reform Through the Backdoor: A Critique of Law and Apologies, Southern California Law Review (2016).


Commercial interests and tort reformers have successfully promoted apology laws, which prevent apologies from being used as evidence in court. He identifies these laws as a new and powerful platform for these groups to advance their specific agendas. further writes that this strategic approach has been remarkably effective. By framing these laws using the appealing language of apologies, proponents have managed to gain support from lawmakers and, significantly, even from those who typically oppose tort reform, resulting in the widespread enactment of such legislation.


The primary means of enforcement of legal liabilities is through the seizure of debtors’ assets. However, debtors can shield their assets in various ways and thereby reduce the power of enforcement. This paper studies the circumstances under which a debtor would choose to shield assets and the value of assets that would be shielded. A key idea is that borrower’s wealth mutes shielding incentives. Intuitively, avoiding debts through shielding requires that enough assets will be shielded, for...

Shielding of Assets and Lending Contracts (Forthcoming, International Review of Law & Economics) Yonathan A. Arbel* ABSTRACT The primary means of enforcement of legal liabilities is through the seizure of debtors’ assets. However, debtors can shield their assets in various ways and thereby reduce the power of enforcement. This paper studies the circumstances under which a debtor would choose to shield assets and the value of assets that would be shielded. A key idea is that borrower’s wealth mutes shielding incentives. Intuitively, avoiding debts through shielding requires that enough assets will be shielded, for else the debts can be collected from exposed assets. A wealthier debtor would...

Yonathan A. Arbel, Shielding of Assets and Lending Contracts, International Review of Law & Economics (2016).


A debtor's wealth significantly influences their decision to shield assets, as wealthier individuals would need to shield a larger volume of assets at greater cost for it to be effective against creditors. his paper develops a theory of asset shielding to explain this behavior, arguing that richer debtors often find it irrational to shield, while poorer debtors pose a higher shielding risk which impacts credit markets.

ete lending contracts, explaining the role of equity agreements, equity cushions and collateral, and debt forgiveness, and explore the some of the policy implications. 1. INTRODUCTION The primary means of enforcement of civil legal liabilities, such as debt contracts, taxes, or tort judgments, is through the seizure of debtors’ assets. However, as Section 2 discusses, debtors are often in a position to circumvent asset seizure by the use of such methods as hiding cash, transferring ownership of property to family members, and using shell corporations. After shielding, creditors will be dissuaded from collecting their debts and debtors may file for bankruptcy and discharge their...


How is a right to specific performance of a contract used by parties? Despite longstanding scholarly interest in the topic, this question has been largely left unexplored. This Article presents a qualitative study of parties and attorneys involved in specific performance litigation. It investigates how parties choose between remedies, whether they negotiate after judgment for specific performance, whether specific performance is implemented, and the difficulties involved in its implementation....

Yonathan A. Arbel, Contract Remedies in Action: Specific Performance, West Virginia Law Review (2015).


Specific performance in contract law is often less effective and less frequently sought than theories suggest. His qualitative study in Israel reveals parties avoid it due to enforceability issues, lawyer agency problems, and changing preferences. When pursued, motivations include signaling or post-judgment renegotiation. Findings show practical enforcement difficulties, especially for unique goods, and challenge assumptions in both rights-based and economic theories, highlighting a gap between legal doctrine and real-world litigant behavior and outcomes, necessitating a re-evaluation of its role and efficacy.


Parties often avoid suing for specific performance due to low enforceability, lawyer agency issues, and evolving preferences. When they do seek it, their reasons can extend beyond simply wanting performance, including signaling case strength, aiming for quicker and less costly resolutions, or strategically positioning themselves for post-judgment renegotiation.


His qualitative study shows many plaintiffs choose damages over specific performance due to its difficult execution, especially for unique goods with unclear standards, and sometimes because lawyers prefer damages for easier fee collection. He notes these practices often contradict established theories, as plaintiffs may resist commodifying judgments (challenging economic views) or use the remedy instrumentally for non-performance goals (challenging rights-based views).

its implementation. The findings reveal important theoretical oversights and challenges to prevailing law. In practice, many plaintiffs opt out of specific performance. This is puzzling as expectation damages are notoriously under compensatory relative to performance. A primary explanation is that it is harder to execute specific relief than a money judgment. Focusing attention on execution provides a valuable lesson: in exactly these circumstances where U.S. law grants specific performance—unique goods—it is least valuable due to a lack of clear standards by which to evaluate performance. Another explanation is lawyer’s bias: attorneys will often advise clients to sue for money damages to...


Contract law features a core debate between economic analysis, focused on efficiency and welfare, and rights-based theories, centered on morality. These perspectives justify remedies differently: rights-based theories often favor specific performance to uphold promises, while economic theories see remedies instrumentally. He notes both frequently neglect the impact of a victim’s choice among available remedies.

to past commitments or evolve in light of new information, ensure proper compensation or create optimal incentives, etc.2 This debate is often understood as being between normative economic analysis and an assortment of moral philosophies, which can be grouped, for convenience, under the heading of rights-based theories.3 The economic analysis stresses efficiency and social welfare, while rights-based theories are more concerned with the morality of actions and intentions.4 Beyond this primary normative distinction, these theories base their respective legal prescriptions on contrasting assumptions about the world in which people contract: their motivations, understandings, and...