Fee-Shifting Rules in Litigation with Contingency Fees

Posted: 23 Jun 2008

See all articles by Kong-Pin Chen

Kong-Pin Chen

Academia Sinica - Research Center for Humanities and Social Sciences; National Taiwan University - Department of Economics

Jue-Shyan Wang

National Chengchi University

Multiple version iconThere are 3 versions of this paper

Date Written: October 2007

Abstract

This article theoretically compares the British and American fee-shifting rules in their influences on the behavior of the litigants and the outcomes of litigation. We build up a comprehensive litigation model with asymmetric information and agency costs, which makes it possible to make comparison on a broad arrays of issues in a single unified framework. We then solve for the equilibria under both American and British rules, and thereby compare their equilibrium settlement amounts and rates, expenditures incurred in trials, as well as the plaintiff's chances of winning and incentive to sue. The theoretical results are broadly consistent with existing empirical evidence.

Suggested Citation

Chen, Kong-Pin and Wang, Jue-Shyan, Fee-Shifting Rules in Litigation with Contingency Fees (October 2007). The Journal of Law, Economics, & Organization, Vol. 23, Issue 3, pp. 519-546, 2007. Available at SSRN: https://ssrn.com/abstract=1150016 or http://dx.doi.org/10.1093/jleo/ewm011

Kong-Pin Chen (Contact Author)

Academia Sinica - Research Center for Humanities and Social Sciences ( email )

RCHSS
Academia Sinica
Nankang, Taipei, 11529
Taiwan
886 2 2789 8160 (Phone)
886 2 2785 4160 (Fax)

HOME PAGE: http://idv.sinica.edu.tw/kongpin/

National Taiwan University - Department of Economics

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

Jue-Shyan Wang

National Chengchi University ( email )

No. 64, Chih-Nan Road
Section 2
Wenshan, Taipei 11623
Taiwan

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