Legal Cost Insurance as a Strategic Device
AbstractLegal Cost Insurance (LCI) is not only a device to reallocate risk, but also to enhance an insured's position in a settlement negotiation. The paper points out that this function of LCI is especially important in cases that have a negative expected value for potential plaintiffs. Hence LCI is of interest even for risk-neutral customers. -- Rechtsschutzversicherungen (LCI) dienen nicht nur der Risikoallokation, sondern verbessern auch die strategische Position des Versicherten in Vergleichsverhandlungen. Dies gilt insbesondere bei Klagen mit negativem Erwartungswert für den potentiellen Kläger. Dadurch sind LCI sogar für risikoneutrale Kunden interessant.
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Bibliographic InfoPaper provided by Saarland University, CSLE - Center for the Study of Law and Economics in its series CSLE Discussion Paper Series with number 97-11.
Date of creation: 1997
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Legal Cost Insurance; Bargaining; Settlement;
Find related papers by JEL classification:
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
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- van Velthoven, Ben & van Wijck, Peter, 2001. "Legal cost insurance and social welfare," Economics Letters, Elsevier, vol. 72(3), pages 387-396, September.
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