Shifting Plaintiffs' Fees versus Increasing Damage Awards
AbstractShifting successful plaintiffs' fees to defendants and increasing damage awards are alternative ways to achieve similar results: increasing plaintiffs' incentives to sue and raising defendants' expected payments. This paper shows that relying on higher damage awards is more efficient than shifting plaintiffs' fees. The reason is that fee-shifting is, perversely, more valuable for plaintiffs with higher litigation costs. Thus, it is possible to substitute higher damage awards for fee-shifting in a manner that leaves deterrence unaffected while eliminating the suits of plaintiffs with the highest litigation costs.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4263.
Date of creation: Feb 1994
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Other versions of this item:
- Louis Kaplow, 1993. "Shifting Plaintiffs' Fees versus Increasing Damage Awards," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 625-630, Winter.
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
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