IDEAS home Printed from https://ideas.repec.org/a/ucp/jlstud/v27y1998i2p519-35.html
   My bibliography  Save this article

Does the English Rule Discourage Low-Probability-of-Prevailing Plaintiffs?

Author

Listed:
  • Polinsky, A Mitchell
  • Rubinfeld, Daniel L

Abstract

One of the principal results in the economic theory of litigation is that the English rule of fee allocation (in which the loser pays the winner's litigation costs) is better at discouraging suits by low-probability-of-prevailing plaintiffs than the American rule (in which each side bears its own costs). This result has been demonstrated under the assumption that all suits that are filed go to trial. Using a standard asymmetric- information model of litigation, we show that when the settlement process is taken into account the English rule results in more low-probability-of-prevailing plaintiffs going to trial than the American rule. In this sense, the English rule encourages low-probability plaintiffs more than the American rule. Copyright 1998 by the University of Chicago.

Suggested Citation

  • Polinsky, A Mitchell & Rubinfeld, Daniel L, 1998. "Does the English Rule Discourage Low-Probability-of-Prevailing Plaintiffs?," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 519-535, June.
  • Handle: RePEc:ucp:jlstud:v:27:y:1998:i:2:p:519-35
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/468031
    Download Restriction: Access to the online full text or PDF requires a subscription.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven Shavell, 1981. "The Social versus the Private Incentive to Bring Suit in a Costly Legal System," NBER Working Papers 0741, National Bureau of Economic Research, Inc.
    2. Hylton, Keith N., 1990. "The influence of litigation costs on deterrence under strict liability and under negligence," International Review of Law and Economics, Elsevier, vol. 10(2), pages 161-171, September.
    3. Png, I. P. L., 1987. "Litigation, liability, and incentives for care," Journal of Public Economics, Elsevier, pages 61-85.
    4. Bebchuk, Lucian Arye, 1988. "Suing Solely to Extract a Settlement Offer," The Journal of Legal Studies, University of Chicago Press, vol. 17(2), pages 437-450, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael R. Baye & Dan Kovenock & Casper G. Vries, 2005. "Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach," Economic Journal, Royal Economic Society, vol. 115(505), pages 583-601, July.
    2. Garoupa, Nuno, 1999. "The economics of political dishonesty and defamation," International Review of Law and Economics, Elsevier, vol. 19(2), pages 167-180, June.
    3. Alex Esteller-More, "undated". "Optimal user charges on judicial ligitation. An analysis for the Spanish case," Studies on the Spanish Economy 67, FEDEA.
    4. Baptiste Massenot & Maria Maraki & Christian Thoeni, 2016. "Legal compliance and litigation spending under the English and American rule: Experimental evidence," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 16.19, Université de Lausanne, Faculté des HEC, DEEP.
    5. Ben Chen & Jose A. Rodrigues Neto, 2017. "Emotions in Civil Litigation," ANU Working Papers in Economics and Econometrics 2017-653, Australian National University, College of Business and Economics, School of Economics.
    6. Christian Schwab & Hin-Yue Tang & Stefan Winter, 2014. "Free choice of legal fee shifting rules?," European Journal of Law and Economics, Springer, vol. 37(2), pages 299-324, April.
    7. Ottoz Elisabetta & Cugno Franco, 2012. "Different Rules of Legal-Cost Allocation and Patent Hold-Up," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201216, University of Turin.
    8. Echazu, Luciana & Garoupa, Nuno, 2012. "Why not adopt a loser-pays-all rule in criminal litigation?," International Review of Law and Economics, Elsevier, vol. 32(2), pages 233-241.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlstud:v:27:y:1998:i:2:p:519-35. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JLS/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.