Group Litigation, Access to Justice and Deterrence

35 Pages Posted: 4 May 2008  

Margherita Saraceno

Bocconi University - Centre for Research on Monetary and Financial Economics; Università degli Studi di Milano-Bicocca - Department of Economics, Quantitative Methods and Business Strategies (DEMS)

Abstract

Policy makers are currently evaluating group litigation as a device to guarantee effective access to justice and to improve deterrence in torts with multiple victims. This paper focuses on how group litigation affects: 1) access to justice, 2) the choice between settlement and litigation, 3) the settlement amount, and finally, 4) deterrence. The main finding is that group litigation does not always improve access to justice and deterrence. On the one hand, group litigation makes it easier for victims to sue, by creating scale economies and improving their confidence in the outcome of a trial. On the other hand, the group is costly for victims to organize and reduces the injurer's liability costs by facilitating settlement and creating scale economies at trial. The combined effect might be a reduction, rather than an increase, in the deterrent effect of tort law.

Keywords: litigation, group litigation, deterrence, access to justice, class action

JEL Classification: K41, K13

Suggested Citation

Saraceno, Margherita, Group Litigation, Access to Justice and Deterrence. Amsterdam Center for Law & Economics Working Paper No. 2008-04. Available at SSRN: https://ssrn.com/abstract=1128058 or http://dx.doi.org/10.2139/ssrn.1128058

Margherita Saraceno (Contact Author)

Bocconi University - Centre for Research on Monetary and Financial Economics ( email )

Milano, 20136
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Quantitative Methods and Business Strategies (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

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