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Incentives To Settle Under Joint And Several Liability: An Empirical Analysis Of Superfund Litigation, Howard F. Chang, Hilary Sigman

All Faculty Scholarship

Congress may soon restrict joint and several liability for cleanup of contaminated sites under Superfund. We explore whether this change would discourage settlements and is therefore likely to increase the program 's already high litigation costs per site. Recent theoretical research by Kornhauser and Revesz finds that joint and several liability may either encourage or discourage settlement, depending on the correlation of outcomes at trial across defendants. We extend their two-defendant model to a richer framework with N defendants. This extension allows us to test the theoretical model empirically using data on Superfund litigation. We find that joint and several …