Litigating BP’s Contribution Claims in Publicly Subsidized Courts: Should Contracting Parties Pay Their Own Way?
38 Pages Posted: 23 Nov 2011
Date Written: November 21, 2011
In this Article, we focus on an important problem involving mass-accident cases that was highlighted by the Deepwater Horizon litigation: overuse of courts to enforce contribution claims. These claims seek to shift incurred or expected liability and damages between the business and governmental entities that participated in the activity that gave rise to the mass-accident risk. Participants in such ventures generally have the option to determine by contract beforehand whether to subject themselves to contribution claims and, if so, whether such claims will be resolved by a publicly funded court or by a privately funded process, such as arbitration. Because the parties prosecuting and defending against contribution claims can consume judicial resources largely free of charge, it is likely they will choose to litigate in court to a greater extent than is socially desirable. We consider whether courts can effectively realign the parties’ incentives by charging them for the cost of using the judicial process. Taking account of the public good of judicial precedent-making, we advance a user-fee design that allows courts to waive the fee in whole or in part for contribution claims that present substantial questions of law. Analysis of the proposal’s application is extended generally to commercial contract disputes. Our central conclusion is that an appropriately designed user fee can effectively abate the problem of overuse without adversely affecting the functioning of the civil liability system.
JEL Classification: K00, K12, K13, K32, K41, K42
Suggested Citation: Suggested Citation