Uncertainty and the Advantage of Collective Settlement

Abstract

This essay explores whether collective settlements offer advantages for achieving just outcomes in light of the various types of uncertainty that arise in mass disputes. Looking in particular at the example of product liability litigation, one can identify at least six areas of potential uncertainty: general causation, liability, exposure, product identification, individual causation, and damages. The essay analyzes each of these six types of uncertainty in terms of the relative advantages of individual adjudication, collective adjudication, individual settlement, and collective settlement. While collective settlement in any case offers the benefits of compromise and efficiency, the justice advantages of collective settlement are most pronounced in cases involving uncertainty regarding product identification, damages, and above all, individual causation. Among mass disputes involving uncertain individual causation, it is possible to identify those disputes that present the strongest opportunities for just outcomes through collective settlements.

Keywords: collective settlement, uncertainty, mass tort, aggregate settlement, class action, specific causation, indeterminate plaintiff, proportional liability

JEL Classification: K13, K41