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Litigation Cost Allocation Rules And Compliance With The Negligence Standard, Keith N. Hylton

Faculty Scholarship

This article examines compliance, incentives to bring suit, and incentives to settle in a negligence regime under alternative litigation cost allocation rules. Four allocation rules are considered: the American rule, which requires each party to pay his own costs; the British rule, which requires the losing party to pay the winning party's costs in addition to his own; the prodefendant rule, which requires the defendant to pay only his own costs if he loses and nothing otherwise; and the proplaintiff rule, which requires the plaintiff to pay only his own costs if he loses and nothing otherwise.