An Economic Model of Collective Redress, Relevant to Joinder Proceedings, Group Litigation and Class Actions

12 Pages Posted: 25 Jan 2012

See all articles by George Robert Barker

George Robert Barker

Australian National University; Wolson College, University of Oxford; Law and Economics Consulting Associates Ltd

Date Written: January 23, 2012

Abstract

In this paper I use club theory to model the formation of collectives in litigation proceedings in a market like setting, or based on contract, with free exit and entry of class participants. Much concern and attention in the literature focuses on free rider problems or principal agent problems that may plague collective redress, to the neglect of positive analysis of the underlying process of collective formation for litigation to exploit economies of scale in production or consumption. The use of club theory to explore the formation of collectives pursuing legal redress provides a basis for making predictions that can be tested through empirical work. It also challenges possibly artificial legal distinctions drawn between joinder proceedings, representative actions, and collective actions, and enables one to assess the likely effects of different legal rules on procedure.

Keywords: Class action, scale effects, club goods, litigation funding

JEL Classification: D03, K00, K42

Suggested Citation

Barker, George Robert, An Economic Model of Collective Redress, Relevant to Joinder Proceedings, Group Litigation and Class Actions (January 23, 2012). Available at SSRN: https://ssrn.com/abstract=1990141 or http://dx.doi.org/10.2139/ssrn.1990141

George Robert Barker (Contact Author)

Australian National University ( email )

Canberra, Australian Capital Territory 0200
Australia

Wolson College, University of Oxford ( email )

Linton Road
Oxford, OX2 6UD
United Kingdom

Law and Economics Consulting Associates Ltd ( email )

Level 9 Chifley Tower
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Sydney, New South Wales 2000
Australia
+61405 394 193 (Phone)

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