The Impact of Frivolous Lawsuits on Deterrence: Do They Have Some Redeeming Value?
AbstractThe literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect the decisions of potential injurers. This paper asks whether there are circumstances under which frivolous suits might actually increase social welfare by inducing parties engaged in risk activities to limit the scale, and improve the safety, of those activities. The reason this is possible is that in a costly legal system, injurers will generally underinvest in safety and overengage in the activity. The fact that some uninjured plaintiffs succeed in obtaining settlements may therefore affect the care and activity choices of injurers in a socially valuable way. In light of these conclusions, the paper goes on to examine the desirability of various policies aimed at curbing frivolous litigation.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2013-26.
Length: 55 pages
Date of creation: Sep 2013
Date of revision:
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Frivolous lawsuits; care; activity level; deterrence;
Find related papers by JEL classification:
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
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