Litigation versus Legislation: Forum Shopping by Rent-Seekers

Abstract:     
To change the law, an interest group must choose between lobbying the legislature and litigating for new precedent. Lobbying becomes more likely as the relative benefits from rule change become greater, as the costs of lobbying become smaller and as the voting strength of the interest groups becomes larger. Litigating becomes more likely as trial costs fall, as the relative benefits from rule change become greater, as the inclination of courts to change existing precedents increases, and as the interest group is involved in more trials. Examples of using a litigating strategy include the NAACP is its battle for racial integration and attorneys seeking change in tort law. Business, in resisting changes to tort law, has used the judicial process. The nature of equilibrium, if any, is not clear.

Number of Pages in PDF File: 28

JEL Classification: D7, H0, K0, L5

working papers series