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Litigation Cost Allocation Rules And Compliance With The Negligence Standard, Keith N. Hylton
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.
Fee Shifting And Incentives To Comply With The Law, Keith N. Hylton
Fee Shifting And Incentives To Comply With The Law, Keith N. Hylton
Faculty Scholarship
Law and economics is a top-heavy discipline, in the sense that it is largely theoretical. Empirical tests of its claims have been carried out only recently, and a great deal remains to be done. The larger part of the recent wave of empirical law and economics research, however, examines the litigation process. This research has focused on the frequencies with which lawsuits are brought and with which they are settled.1 Surprisingly, empirical researchers2 have given little attention to the theoretical literature that makes predictions concerning incentives to comply with legal rules and the optimality of compliance equilibria.3 This lack of …