Aggregate Litigation and Regulatory Innovation: Another View of Judicial Efficiency

ICER Working Paper No. 24/2011

25 Pages Posted: 19 Dec 2011

See all articles by Giovanni Battista Ramello

Giovanni Battista Ramello

University of Piemonte Orientale - A. Avogadro - Department of Public Policy and Public Choice; International Centre for Economic Research (ICER)

Date Written: December 19, 2011

Abstract

In this article, we argue that aggregate litigation and the court system can not only restore the protection of victims and the production of deterrence, but also play a pivotal role in stimulating regulatory innovation. This is accomplished through a reward system that seems largely to mimic the institutional devices used in other domains, such as intellectual property rights, by defining a proper set of incentives. Precisely the described solution relies on creating a specific economic framework able to foster economies of scale and grant a valuable property right over a specific litigation to an entrepreneurial individual, who in exchange provides the venture capital needed for the legal action, and produces inputs and focal points for amending regulations. In this light, aggregate litigation thus can be equally seen as an incubator for regulation.

Keywords: aggregate litigation, efficiency, market for risk, hierarchy, regulation, innovation, asbestos

JEL Classification: K41, O31, G32, L23

Suggested Citation

Ramello, Giovanni Battista, Aggregate Litigation and Regulatory Innovation: Another View of Judicial Efficiency (December 19, 2011). ICER Working Paper No. 24/2011, Available at SSRN: https://ssrn.com/abstract=1974473 or http://dx.doi.org/10.2139/ssrn.1974473

Giovanni Battista Ramello (Contact Author)

University of Piemonte Orientale - A. Avogadro - Department of Public Policy and Public Choice ( email )

Via Cavour 84
15100 Alessandria
Italy

International Centre for Economic Research (ICER) ( email )

Villa Gualino
Viale Settimio Severo, 63
10133 Torino
Italy

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