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The Hypocrisy of the Milberg Indictment: The Need for a Coherent Framework on Paying for Cooperation in Litigation


Bruce H. Kobayashi


George Mason University - School of Law

Larry E. Ribstein (Deceased)


University of Illinois College of Law; PERC - Property and Environment Research Center

January 2007

George Mason Law & Economics Research Paper No. 07-04
U Illinois Law & Economics Research Paper No. LE07-001

Abstract:     
The indictment of the Milberg, Weiss firm and two of its named partners for allegedly illegal payments to lead plaintiffs stands at the intersection of important recent developments in both the expanding criminalization of corporate conduct and the federalization of corporate law. Many have noted the irony and hypocrisy of the Milberg firm's alleged use of illegal tactics to prosecute corporate illegality. However, the more important hypocrisy is that Milberg's prosecutors are essentially paying the same witness - Vogel - that Milberg is being prosecuted for paying. This case illustrates the need to need to develop coherent standards regarding payments to litigants and witnesses. These standards should take account of the incentive effects of the payments, rather than being based on a desire to discourage or encourage particular types of actions.

Number of Pages in PDF File: 23

Keywords: Milberg Weiss, federalism, class actions, agency costs, lead plaintiffs, witness payments

JEL Classification: K10, K14, K22, K41, K42, H77

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Date posted: January 11, 2007 ; Last revised: November 26, 2007

Suggested Citation

Kobayashi, Bruce H. and Ribstein (Deceased), Larry E., The Hypocrisy of the Milberg Indictment: The Need for a Coherent Framework on Paying for Cooperation in Litigation (January 2007). George Mason Law & Economics Research Paper No. 07-04; U Illinois Law & Economics Research Paper No. LE07-001. Available at SSRN: http://ssrn.com/abstract=955952 or http://dx.doi.org/10.2139/ssrn.955952

Contact Information

Bruce H. Kobayashi
George Mason University - School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8034 (Phone)
703-993-8088 (Fax)
HOME PAGE: http://mason.gmu.edu/~bkobayas
Larry Edward Ribstein (Deceased) (Contact Author)
University of Illinois College of Law ( email )
504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
217-244-9881 (Phone)
217-244-1478 (Fax)
PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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