Since litigation at first blush appears to be a zero-sum game, and the prisoner's dilemma by definition is not (both parties can "win"), some explanation is required. Litigation itself results from a defection. Sometimes it is brought by the first to defect (the most shocking lawsuit I ever saw in my practice was brought by an insurance company as an extortionate move to force my client to sell them the source code of their product). More often it is brought by the offended party as a retaliation for defection. However, virtually every lawsuit could have been avoided by an act of cooperation.
Defections resulting in litigation include: I accept your goods, but I do not pay you; I fire you without notice and without cause; I am not faithful to you so you wish to divorce me. In each of these cases, had I played the cooperation card, there would have been no litigation.
Please note that cooperation does not mean capitulation; eg, I keep you on when I really should fire you. Instead, it means telling the truth, handling you honestly, gently, and firmly. If you work for me, but we do not get on, because you won't take direction and I won't abandon authority, no doubt we should part company. You are very likely to sue me if I pack up your office and change the locks. But if I have counselled you firmly and honestly several times, and now I tell you we must part company but I will give you a a reasonable amount of time to find another job and will not hurt you with a bad reference, we are much more likely to part peacefully, if not friends. I discovered while practicing law that a great deal of litigation could be avoided if adverse decisions are explained and are implemented fairly rather than abruptly. People can usually take painful truths; its being lied to they can't stand. The people who sue in spite of honest, open treatment tend to be the free riders, the habitual litigators hoping to win the courthouse lottery.
Even once we are in litigation, we are still in a prisoner's dilemma. First, litigation is not entirely zero-sum; we may settle on some mutually acceptable, even beneficial middle ground. Also, there are numerous other opportunities for cooperation or betrayal in the course of a lawsuit: opportunities to clarify or muddy, advance or delay, exchange or withhold documents, and so forth.
At this point, it may be the lawyers who are playing more actively than their clients (as many as six or eight rounds for every interraction of the clients with each other.) It is the lawyers who offer or withhold documents, agree to or stall trial dates, and have many other contacts with one another in which the clients may play no role.
The legal system was designed to coerce lawyers to play in the cooperation zone as much as possible. Civil rules provide detailed requirements for the release of documents, scheduling of depositions and the like. No-one is permitted to defect from this process without a really good excuse, and the penalties for an unwarranted defection are set to outweigh the benefits (a lawyer disregarding the rules of civil procedure may personally pay a fine, or even be held in contempt of court and jailed.)
Richard Dawkins, in chapter 12 of The Selfish Gene, claims that lawyers cooperate to force their clients to defect; for example, he says, they may make demands that by familiarity or even pre-arrangement with the other lawyer they know will be declined, driving the legal bill up. In ten years of litigation, I never saw this happen (though I did see attorneys overbill clients, it never involved collusion with the adversary.) The reality is that, although the system was set up to force the attorneys to collaborate to bring the case to a speedy and fair conclusion, these days attorneys defect from each other as often as their clients do.
When you read the Federal Rules of Civil Procedure or some of the state codes, you may have the same feeling of pleasure you get from reading a simple but powerful algorithm or a well written essay of advocacy: the thing is well constructed, logical and fair, and it damn well ought to work, if it weren't for human nature!
The rules permit you to demand documents from the other side, which you must describe with reasonable specificity. The documents you demand must be relevant or at least likely to lead to relevant evidence. If I object to anything you have requested, I must have reasons that the rule recognizes, and I must explain them. When followed, such rules advance cases to a quick, fair resolution and make litigation bearable.
However, resolving disputes fairly ceased to be the purpose of litigation some decades ago; winning at any price has become the main goal. As a result, despite the shadow of the future, most lawyers are defectors. You send a notice to take the other party's deposition. You call a week in advance of the date set and are told the other party cannot appear. After several unsuccessful attempts to set a new date, you make a motion to compel the other party's attendance, which is granted. Nevertheless, the other party still fails to show up; you must make a second motion, which the court grants, marking it a "final" order, meaning that if the other party fails to show this time, he will automatically lose the case. This time, you will get your deposition (unless you unwisely agree to an adjournment, in which case the other lawyer considers himself free of the "final" order and the whole dance starts again.)
At this point, at the rates I used to charge, you are anywhere from $600 to $2000 richer. But you don't want the money. There are only sixty or eighty hours you want to work in a week, and there were other more meaningful tasks--research memos, contract drafting, or new client development--you had to forego for this aggravating nonsense. Also, you have now lost as much as six months, and your client is losing confidence in you and in the system. If other lawyers didn't stonewall, we could all get a lot more work done and close cases faster.
You would think the other lawyers would want that too. The lawyer who drags things out today, because he is representing a defendant, may represent a plaintiff tomorrow and be eager to move things along. We would all benefit from cooperation.
Lawyers don't see it that way, and, as a result, defection is constant. In large cities such as New York, the shadow of the future may be slight, because the chance of meeting a particular lawyer again is not great. Also, in some courts, you never see the same judge twice on the motions and preliminary matters in your case, so your defecting adversary never fears punishment from an exasperated judge with a knowledge of his defections. (You may try to educate the judge on your adversary's behavior, but since your adversary is busy trying to persuade the judge you are the defector, the judge is likely to throw his hands up in disgust and disregard both efforts.) Finally, many judges themselves are ex-defectors appointed to the bench after faithful service to the local dominant political party, and are very indulgent of their former colleague's behavior.
As a result, sanctions provided by procedural rules are rarely applied. Ironically, when the federal courts put some teeth into their defection penalty, Rule 11, defectors began using it as a terroristic tool to beat up honest lawyers, who were reluctant to use it against the defectors. The rule says that a lawyer bringing a frivolous action or motion must personally pay the other side's legal fees for opposing it. The lawyers quickest to rely on Rule 11 were the ones who should have feared most from it, possibly on the theory that a preemptive strike was the best way to avoid it.
Lawyers are defectors partly because the rewards exceed the risks, partly because the shadow of the future is slight, and largely because they are trained to win, not to seek justice. A vigorous defense, to which every client is entitled, has become translated into victory by any means necessary. An old legal adage says that when neither the law nor the facts are on your side, bang on the table and shout. Rather than relying on the truth of a claim to win the dialectical battle, defectors manipulate the rules, undoing the process itself in order to win.
I did find one corner of the legal industry in which the game was played in perfect cooperation. My cousin Artie the personal injury attorney specialized in "soft tissue" cases, small ticket matters in which the plaintiff had little evidence of injury. Artie spent all day on the phone, talking to insurance claims adjusters, settling soft tissue cases for $4,000 to $10,000 a pop. One day, Artie explained to me that the lawyers and the adjusters had an understanding: "We don't squeeze them for top dollar, they don't squeeze us for bottom dollar." Adversaries played the cooperation card on every move, out of long familiarity and with perfect knowledge that they would encounter each other every week of their professional lives.