Settling Multidefendant Lawsuits: The Advantage of Conditional Setoff Rules
AbstractIn cases involving multiple defendants, each defendant's incentive to settle is influenced by the setoff rule enforced in the relevant jurisdiction. This article suggests that the effect of a setoff rule depends on whether the setoff is conditional on a finding that the settling defendant or defendants were legally liable. Previous research, which assumed that the setoff was unconditional, found that the two principal rules applied by modern courts - the pro tanto and proportionate share rules - often discourage settlement when the plaintiff's probabilities of prevailing against each defendant are not perfectly correlated. This article shows that the disincentive to settlement can be reduced or eliminated by making the setoff conditional on the liability of the settling defendant or defendants. The conditional setoff rules are of practical as well as theoretical interest because several states currently apply them. Copyright 1996 by the University of Chicago.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Legal Studies.
Volume (Year): 25 (1996)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JLS/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Che, Yeon-Koo & Spier, Kathryn, 2007.
"Exploiting Plaintiffs Through Settlement: Divide and Conquer,"
6104, University Library of Munich, Germany.
- Yeon-Koo Che & Kathryn E. Spier, 2008. "Exploiting Plaintiffs through Settlement: Divide and Conquer," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(1), pages 4-23, March.
- Yeon-Koo Che & Kathryn E. Spier, 2007. "Exploiting Plaintiffs Through Settlement: Divide and Conquer," Discussion Papers 0607-18, Columbia University, Department of Economics.
- Howard F. Chang & Hilary Sigman, 2005.
"The Effect of Joint and Several Liability under Superfund on Brownfields,"
Departmental Working Papers
200508, Rutgers University, Department of Economics.
- Chang, Howard F. & Sigman, Hilary, 2007. "The effect of joint and several liability under superfund on brownfields," International Review of Law and Economics, Elsevier, vol. 27(4), pages 363-384, December.
- Howard F. Chang & Hilary Sigman, 2005. "The Effect of Joint and Several Liability Under Superfund on Brownfields," NBER Working Papers 11667, National Bureau of Economic Research, Inc.
- Hviid, Morten & Medvedev, Andrei, 2010.
"The role of contribution among defendants in private antitrust litigation,"
International Review of Law and Economics,
Elsevier, vol. 30(4), pages 306-316, December.
- Morten Hviid & Andrei Medvedev, 2008. "The Role of Contribution among Defendants in Private Antitrust Litigation," Working Papers 08-3, Centre for Competition Policy, University of East Anglia.
- Howard F. Chang & Hilary Sigman, 1999. "Incentives to Settle Under Joint and Several Liability," NBER Working Papers 7096, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.