Tort Liability Litigation Costs for Commercial Claims

59 Pages Posted: 10 Jun 2007 Last revised: 27 Nov 2012

See all articles by Joni Hersch

Joni Hersch

Vanderbilt University - Law School; IZA Institute of Labor Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - College of Arts and Science - Department of Economics

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - College of Arts and Science - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 6, 2007

Abstract

This paper analyzes tort liability litigation costs using the Texas Department of Insurance Commercial Liability Insurance Closed Claim database for the years 1988-2004. Insurer costs to defend claims in which a suit was filed average $35,000 per claim in 2004$, which corresponds to a share of 0.18 of total expenditures. Claims with higher stakes and complexity lead to greater reliance on outside counsel and less reliance on in-house counsel. Total transactions costs for each dollar received by claimants average $0.75 for all claims and $0.83 for claims in which the claimant retained an attorney and a suit was filed.

Keywords: liability, insurance, torts, litigation costs, transactions costs

JEL Classification: K13, K41

Suggested Citation

Hersch, Joni and Viscusi, W. Kip, Tort Liability Litigation Costs for Commercial Claims (September 6, 2007). Vanderbilt Law and Economics Research Paper No. 07-16, Available at SSRN: https://ssrn.com/abstract=991696 or http://dx.doi.org/10.2139/ssrn.991696

Joni Hersch

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7717 (Phone)
615-322-6631 (Fax)

HOME PAGE: http://law.vanderbilt.edu/bio/?pid=joni-hersch

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States

HOME PAGE: http://business.vanderbilt.edu/bio/joni-hersch/

Vanderbilt University - College of Arts and Science - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/bio/?pid=w-kip-viscusi

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - College of Arts and Science - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://as.vanderbilt.edu/economics/bio/wkip-viscusi/

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://business.vanderbilt.edu/bio/w-kip-viscusi/

Vanderbilt University - Strategy and Business Economics

Nashville, TN 37203
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
248
Abstract Views
2,189
Rank
224,198
PlumX Metrics