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Why not adopt a loser-pays-all rule in criminal litigation?

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  • Echazu, Luciana
  • Garoupa, Nuno

Abstract

In this paper we consider the potential effects that the application of a loser-pays-all rule may have on criminal litigation, including the decision to prosecute, criminal deterrence and legal error. We find that the effects of fee shifting on deterrence and on miscarriage of justice go in opposite directions. We also look at the effects of this rule on the rate of settlements (plea-bargaining) and when one party is wealth-constrained. We apply the insights of our model to current policy discussions such as the use of RICO proceedings and the financing of enforcement authorities in the United States.

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Bibliographic Info

Article provided by Elsevier in its journal International Review of Law and Economics.

Volume (Year): 32 (2012)
Issue (Month): 2 ()
Pages: 233-241

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Handle: RePEc:eee:irlaec:v:32:y:2012:i:2:p:233-241

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Web page: http://www.elsevier.com/locate/irle

Related research

Keywords: Loser-pays-all rule; Fee shifting; Prosecutor; Criminal litigation;

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References

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  1. Hugh Gravelle & Nuno Garoupa, . "Optimal Deterrence with Legal Defence Expenditure," Discussion Papers 00/08, Department of Economics, University of York.
  2. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  3. A. Mitchell Polinsky & Daniel L. Rubinfeld, 1996. "Optimal Awards and Penalties When the Probability of Prevailing Varies Among Plaintiffs," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 269-280, Summer.
  4. Hause, John C, 1989. "Indemnity, Settlement, and Litigation, or I'll Be Suing You," The Journal of Legal Studies, University of Chicago Press, vol. 18(1), pages 157-79, January.
  5. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
  6. Katz, Avery, 1987. "Measuring the Demand for Litigation: Is the English Rule Really Cheaper?," Journal of Law, Economics and Organization, Oxford University Press, vol. 3(2), pages 143-76, Fall.
  7. Garoupa, Nuno, 1997. " The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-95, September.
  8. Snyder, Edward A & Hughes, James W, 1990. "The English Rule for Allocating Legal Costs: Evidence Confronts Theory," Journal of Law, Economics and Organization, Oxford University Press, vol. 6(2), pages 345-80, Fall.
  9. Nuno Garoupa, 2008. "Some reflections on the economics of prosecutors: Mandatory v selective prosecution," Working Papers 2008-04, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  10. Miceli, Thomas J, 1990. "Optimal Prosecution of Defendants Whose Guilt Is Uncertain," Journal of Law, Economics and Organization, Oxford University Press, vol. 6(1), pages 189-201, Spring.
  11. Nuno Garoupa, 2009. "The English rule with payments upfront," Portuguese Economic Journal, Springer, vol. 8(3), pages 177-181, December.
  12. Daniel L. Rubinfeld & David E.M. Sappington, 1987. "Efficient Awards and Standards of Proof in Judicial Proceedings," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 308-315, Summer.
  13. Vincy Fon & Hans-Bernd Schäfer, 2007. "State Liability for Wrongful Conviction: Incentive Effects on Crime Levels," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 269-284, June.
  14. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
  15. Nuno Garoupa, 2000. "Corporate criminal law and organization incentives: A managerial perspective," Economics Working Papers 529, Department of Economics and Business, Universitat Pompeu Fabra.
  16. Peter Van Wijck & Ben Van Velthoven, 2000. "An Economic Analysis of the American and the Continental Rule for Allocating Legal Costs," European Journal of Law and Economics, Springer, vol. 9(2), pages 115-125, March.
  17. Hylton, Keith N., 2002. "An asymmetric-information model of litigation," International Review of Law and Economics, Elsevier, vol. 22(2), pages 153-175, August.
  18. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-97, September.
  19. Nuno Garoupa & Matteo Rizzolli, 2011. "The Brady Rule May Hurt the Innocent," American Law and Economics Review, Oxford University Press, vol. 13(1), pages 168-200.
  20. Polinsky, A Mitchell & Rubinfeld, Daniel L, 1998. "Does the English Rule Discourage Low-Probability-of-Prevailing Plaintiffs?," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 141-57, January.
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