The Social versus Private Incentive to Sue
AbstractThe private value of lawsuits is based on plaintiffs' expected recovery at trial compared to their filing costs, whereas the social value consists of the incentives suits create for injurers to invest in accident avoidance. Generally, there is no relationship between these two values: there may be either too many or too few suits from a social perspective. Thus, there is scope for corrective measures, although there is no simple policy. Extending the model to consider a negligence rule rather than strict liability, and to allow for pretrial settlements, leads to some modified conclusions but does not alter the basic insights.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2008-12.
Length: 21 pages
Date of creation: Apr 2008
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Accidents; deterrence; lawsuits; litigation costs; social versus private value;
Find related papers by JEL classification:
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
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