Jury Selection

Jury selection relies on two basic elements: candidate self-selection and sortition. In order to avoid retaliation and intimidation, jurors are not required to provide proof of identity to be drawn.
The key challenge is:*** how to create the right incentives for anonymous jurors to adjudicate claims in an honest way?***

As the Greek understood centuries ago, this problem can be solved by a combination of a token and a random selection mechanism. Anyone can self-select as candidate to be a juror in specific subcourt by using a reputation token called pinakion (PNK). The probability to be drawn as juror is proportional to the amount of tokens a user deposits in a subcourt. The higher the amount of tokens a user activates, the higher the probability he will be drawn as juror. Users have an economic incentive for serving as jurors: collecting arbitration fees.

Jury selection is done randomly among all the users that activated their pinakion in a subcourt. Activated pinakion will be frozen during the court session and will be unfrozen after the court has reached a verdict.
Clément, an insurance expert, can be drawn as juror in the General Court and in the Insurance Subcourt. Chief can be drawn as juror in the General Court, in the E-Commerce Subcourt and in the Freelancing Subcourt.

Analysis

Users that are drawn as jurors will have access to the evidence for analysis and voting a decision. Subcourts will have different parameters regarding procedure and the time jurors will have to reach a decision, the complexity of the voting options and the possibility of communicating with the parties.

A simple dispute could involve only two parties and only two options. In the Giselle vs. Miguel dispute, the decision could be: “Who is right in the dispute? Giselle or Miguel?”. The winner would receive the full payment. A slightly more complex option would be: “From 0 to 100, how guilty is Miguel?”. This would allow to split the payment in different parts.

At is early stage of the project, Kleros will work mostly for simple disputes involving two parties and simple voting options. Over time, as technology improves, more complex disputes will be adjudicated.

Voting

After assessing the evidence, jurors vote one of the options. They are also required to provide a justification for their decision. The winning option is the median one, which gives a consensual result and is robust to strategic voting.

Appeals

If a party is not satisfied with a decision, it can appeal and have the case ruled again. Decisions can be appealed several times. In each round, a new jury will be formed with twice as many jurors than the previous instance plus one. The appealing party will be required to make a new deposit in order to pay for arbitration fees. Losers can choose to keep on appealing and keep paying arbitration fees at a steeply rising cost in each round.
The Kleros adjudication process.

Token Redistribution

After a decision has been made, comes an instance of token redistribution. Tokens are unfrozen and redistributed among jurors. Jurors will gain or lose pinakion depending on whether their vote was coherent with the rest.

Redistribution if based on the concept of Schelling point. Game theorist Thomas Schelling called focal point a solution that people tend to use to coordinate their behavior in the absence of communication. Schelling points also arise when communication is possible but parties do not trust each other. Based on the concept of Schelling Points, Vitalik Buterin has proposed the creation of the Schelling Coin, a token that aligns telling the truth with economic incentives.

Assuming that jurors were properly selected, that they were correctly incentivized and that they had access to the same evidence, we would expect them to reach a similar verdict. Kleros assumes that jurors who voted incoherently with the rest were not properly qualified (they self-selected into a wrong subcourt), that they did not conduct a proper analysis (they voted quickly just to collect the arbitration fee) or that their goal was not discovering the truth (they were bribed).

Economic incentives for jurors come from two different sources.: 1) Arbitration fees are payments from parties to jurors as a compensation for the time and expertise invested in analyzing evidence and voting. All jurors adjudicating a claim will earn the same amount; 2) Token redistribution from jurors who voted incoherently to jurors who voted coherently.

Imagine that the dispute between Arya and Sansa was solved with 7 jurors. Jurors Ignasi and Julio, who voted incoherently with the majority, have their tokens redistributed proportionally to the jurors who voted coherently. The net effect (arbitration fees minus tokens) will depend on the difference between the value of the earned arbitration fee and the value of lost tokens.
Sansa, the loser in the dispute against Arya loses his 100$ deposit, which is used to pay arbitration fees to all jurors. Ignasi and Julio, the two jurors that voted incoherently with the rest, lose their pinakion, which are transferred to the jurors who voted coherently. Daniel, Ezequiel, Frédéric, Gabriela and Hadass, the jurors who voted coherently, experience an economic gain in fees and tokens. Ignasi and Julio, the jurors who voted incoherently, earn arbitration fees but lose pinakion.

As usual, some users will try to abuse the system. But Kleros is hard to game. Manny learnt this the hard way. He had always thought of himself as the smartest guy in the room. When he found out about Kleros, he saw it as an opportunity to make some easy money. He bought some pinakion and started to activate them in subcourts with high arbitration fees. Of course that, when he was drawn as a juror, he would not even read the evidence. Manny just voted randomly, collected the arbitration fee and moved on to another dispute.

A couple of weeks into his “brilliant scheme”, he realized that he was suffering a net loss. Manny earned some money in arbitration fees. But, since his vote was often incoherent with the rest, he systematically lost pinakion. After a couple of weeks, he realized the net effect was negative and he abandoned his intention of trying to game the system.

The pinakion is a critical part of the mechanism because it prevents sybil attacks and provides incentives for Kleros to produce true verdicts. The expectation of winning or losing tokens gives jurors the incentive to self-select into the subcourts where they truly have expertise, to analyze the evidence carefully and to vote honestly. A juror who chooses the wrong cases, who does not analyze the evidence carefully or who does not vote honestly is more likely to vote incoherently with others and, as a result, will suffer an economic loss.

CONCLUSION

Kleros offers a dispute resolution protocol for the modern digital world that supersedes traditional jurisdictional areas as the world trends towards globalization. The potential of smart contracts to disrupt transactions and agreements between parties in an efficient and automated manner will inevitably lead to the need for a decentralized court system.

With the right incentive mechanisms enforced by proven game theory mechanics and the underlying blockchain providing the transparency and integrity needed, Kleros looks to become the justice protocol of the future.

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