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“Piggyback” lawsuits and deterrence: Can frivolous litigation improve welfare?

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  • Miceli, Thomas J.
  • Stone, Michael P.

Abstract

Previous literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect deterrence. This paper considers whether there are circumstances under which frivolous suits might actually increase deterrence, and thereby possibly improve welfare. The reason this is possible is that in a costly legal system, injurers will generally be underdeterred because they will ignore the litigation costs of plaintiffs. The fact that some uninjured plaintiffs will succeed in obtaining settlements may therefore affect the care and activity choices of injurers in a socially valuable way.

Suggested Citation

  • Miceli, Thomas J. & Stone, Michael P., 2014. "“Piggyback” lawsuits and deterrence: Can frivolous litigation improve welfare?," International Review of Law and Economics, Elsevier, vol. 39(C), pages 49-57.
  • Handle: RePEc:eee:irlaec:v:39:y:2014:i:c:p:49-57
    DOI: 10.1016/j.irle.2014.05.003
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    More about this item

    Keywords

    Frivolous lawsuits; Care; Activity level; Deterrence;
    All these keywords.

    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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