IDEAS home Printed from https://ideas.repec.org/a/eee/irlaec/v30y2010i3p236-243.html
   My bibliography  Save this article

Tort law and probabilistic litigation: How to apply multipliers to address the problem of negative value suits

Author

Listed:
  • De Mot, Jef
  • Depoorter, Ben

Abstract

This article advances a proposal that increases access to justice for valuable lawsuits that are currently discouraged by litigation costs. Our proposal converts claims with negative expected values into positive expected value claims by implementing a novel system involving flexible conditional multipliers. Our proposal has two components. First, under the proposed system a plaintiff is allowed to select a damage multiplier that determines the amount of damages the plaintiff receives if the litigation is successful. Second, courts select cases for litigation randomly with a probability inverse to the multiplier selected by the plaintiff.

Suggested Citation

  • De Mot, Jef & Depoorter, Ben, 2010. "Tort law and probabilistic litigation: How to apply multipliers to address the problem of negative value suits," International Review of Law and Economics, Elsevier, vol. 30(3), pages 236-243, September.
  • Handle: RePEc:eee:irlaec:v:30:y:2010:i:3:p:236-243
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0144-8188(10)00012-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Waldfogel, Joel, 1998. "Reconciling Asymmetric Information and Divergent Expectations Theories of Litigation," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 451-476, October.
    2. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    3. Hirshleifer, Jack & Osborne, Evan, 2001. "Truth, Effort, and the Legal Battle," Public Choice, Springer, vol. 108(1-2), pages 169-195, July.
    4. Osborne, Evan, 1999. "Who should be worried about asymmetric information in litigation?," International Review of Law and Economics, Elsevier, vol. 19(3), pages 399-409, September.
    5. Miller, James D, 1997. "Using Lotteries to Expand the Range of Litigation Settlements," The Journal of Legal Studies, University of Chicago Press, vol. 26(1), pages 69-94, January.
    6. Keith N. Hylton & Thomas J. Miceli, 2005. "Should Tort Damages be Multiplied?," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(2), pages 388-416, October.
    7. Matthew Rabin & Richard H. Thaler, 2013. "Anomalies: Risk aversion," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 27, pages 467-480, World Scientific Publishing Co. Pte. Ltd..
    8. Joni Hersch & W. Kip Viscusi, 2007. "Tort Liability Litigation Costs for Commercial Claims," American Law and Economics Review, Oxford University Press, vol. 9(2), pages 330-369.
    9. Keith N. Hylton, 2002. "Welfare Implications of Costly Litigation under Strict Liability," American Law and Economics Review, Oxford University Press, vol. 4(1), pages 18-43, January.
    10. Siegelman, Peter & Waldfogel, Joel, 1999. "Toward a Taxonomy of Disputes: New Evidence through the Prism of the Priest/Klein Model," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 101-130, January.
    11. Farmer, Amy & Pecorino, Paul, 1999. "Legal Expenditure as a Rent-Seeking Game," Public Choice, Springer, vol. 100(3-4), pages 271-288, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ramello, Giovanni B., 2012. "Aggregate litigation and regulatory innovation: Another view of judicial efficiency," International Review of Law and Economics, Elsevier, vol. 32(1), pages 63-71.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhou, J., 2010. "Access to justice : An economic approach," Other publications TiSEM 9d70f451-35c4-4878-92bf-7, Tilburg University, School of Economics and Management.
    2. Chopard, Bertrand & Cortade, Thomas & Langlais, Eric, 2010. "Trial and settlement negotiations between asymmetrically skilled parties," International Review of Law and Economics, Elsevier, vol. 30(1), pages 18-27, March.
    3. Farmer Amy & Pecorino Paul, 2016. "Litigation with a Variable Cost of Trial," Review of Law & Economics, De Gruyter, vol. 12(2), pages 203-226, July.
    4. Eric Langlais, 2008. "Asymmetric information, self-serving bias and the pretrial negotiation impasse," Working Papers hal-04140725, HAL.
    5. Eric Langlais, 2008. "Asymmetric information, self-serving bias and the pretrial negotiation impasse," EconomiX Working Papers 2008-30, University of Paris Nanterre, EconomiX.
    6. Florian Baumann & Tim Friehe, 2012. "Contingent fees meet the British rule: an exploratory study," Public Choice, Springer, vol. 150(3), pages 499-510, March.
    7. Poitras, Marc & Frasca, Ralph, 2011. "A unified model of settlement and trial expenditures: The PriestâKlein model extended," International Review of Law and Economics, Elsevier, vol. 31(3), pages 188-195, September.
    8. Polinsky, A. Mitchell & Shavell, Steven, 2014. "Costly litigation and optimal damages," International Review of Law and Economics, Elsevier, vol. 37(C), pages 86-89.
    9. Alex Robson & Stergios Skaperdas, 2008. "Costly enforcement of property rights and the Coase theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(1), pages 109-128, July.
    10. Argenton, Cedric & Wang, Xiaoyu, 2020. "Litigation and Settlement under Loss Aversion," Discussion Paper 2020-008, Tilburg University, Center for Economic Research.
    11. Florian Baumann & Tim Friehe, 2012. "Emotions in litigation contests," Economics of Governance, Springer, vol. 13(3), pages 195-215, September.
    12. Kyung Hwan Baik & In‐Gyu Kim, 2007. "Strategic Decisions On Lawyers’ Compensation In Civil Disputes," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 854-863, October.
    13. Christoph Engel & Lilia Zhurakhovska, 2011. "Oligopoly as a Socially Embedded Dilemma. An Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_01, Max Planck Institute for Research on Collective Goods.
    14. Stergios Skaperdas & Samarth Vaidya, 2012. "Persuasion as a contest," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(2), pages 465-486, October.
    15. Matteo Rizzolli & Luca Stanca, 2012. "Judicial Errors and Crime Deterrence: Theory and Experimental Evidence," Journal of Law and Economics, University of Chicago Press, vol. 55(2), pages 311-338.
    16. Rosa Ferrer, 2015. "The Effect of Lawyers' Career Concerns on Litigation," Working Papers 844, Barcelona School of Economics.
    17. Baik, Kyung Hwan & Kim, In-Gyu, 2007. "Contingent fees versus legal expenses insurance," International Review of Law and Economics, Elsevier, vol. 27(3), pages 351-361, September.
    18. Samarth Vaidya, 2006. "The Nature of Corruption Deterrence in a Competitive Media Sector," Economics of Governance, Springer, vol. 7(3), pages 229-243, August.
    19. Zhou, J., 2007. "In Litigation : How Far do the “Haves” Come Out Ahead," Other publications TiSEM 84767819-ad3f-431f-a39a-6, Tilburg University, School of Economics and Management.
    20. Zhou, J., 2007. "In Litigation : How Far do the “Haves” Come Out Ahead," Discussion Paper 2007-10, Tilburg University, Center for Economic Research.

    More about this item

    Keywords

    Litigation Procedure Tort law;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:irlaec:v:30:y:2010:i:3:p:236-243. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/irle .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.