The Effect of Fee-Shifting Rules on Settlement Terms

Posted: 31 Jan 1997  

Lucian A. Bebchuk

Harvard Law School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)

Date Written: September 1996

Abstract

The large economic literature on fee-shifting rules has focused on the effects that they have on the likelihood of settlement and the incentive to sue. In contrast, this paper focuses on the rules' effect on the terms of settlement. The analysis demonstrates that fee-shifting rules influence the terms of settlement, and it further identifies the effect of each of the main fee-shifting rules on settlement terms. For each such rule, the analysis examines whether the rule will make settlement terms more favorable to the plaintiff or the defendant -- and also whether the rule will move these terms closer to or further away from the expected judgement.

JEL Classification: K41

Suggested Citation

Bebchuk, Lucian A., The Effect of Fee-Shifting Rules on Settlement Terms (September 1996). Available at SSRN: https://ssrn.com/abstract=10295

Lucian A. Bebchuk (Contact Author)

Harvard Law School ( email )

Cambridge, MA 02138
United States
617-495-3138 (Phone)
617-812-0554 (Fax)

HOME PAGE: http://www.law.harvard.edu/faculty/bebchuk/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)

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