25 Pages Posted: 17 May 2010 Last revised: 29 Jul 2014
Date Written: May 1, 2010
Using the familiar insight that principals and agents can jointly gain by reducing agency costs, this essay argues (1) that lawyers hoping to attract clients should seek to improve the quality of representation in mass tort cases and to signal their reliability and honesty; (2) that lawyers have sought to adopt innovations that would reduce agency costs, including governance arrangements designed to address monitoring problems, facilitate collective choice by clients, and provide in advance for the allocation of settlement funds; (3) that courts, relying on state bar rules and other laws designed for single-client representations, have undermined lawyers’ efforts by stifling these innovations; and (4) that, by preventing lawyers from innovating, judges have insulated agency problems in mass tort representations from attack and have disserved clients despite seeking to protect them.
This essay comments on articles by other authors that were presented at a conference on the American Law Institute’s Project on the Principles of Aggregate Litigation, of which the author is Associate Reporter. The papers and this essay will be published in a symposium issue of the George Washington Law Review in 2011.
Keywords: agency costs, aggregate settlements, mass tort, legal ethics
JEL Classification: D23, D29, K41, L14
Suggested Citation: Suggested Citation
Silver, Charles, Ethics and Innovation (May 1, 2010). George Washington Law Review, 2011; U of Texas Law, Law and Econ Research Paper No. 186. Available at SSRN: https://ssrn.com/abstract=1607852