Deterrence and Aggregate Litigation

31 Pages Posted: 27 Oct 2017 Last revised: 18 Jul 2019

See all articles by Keith N. Hylton

Keith N. Hylton

Boston University - School of Law

Date Written: March 1, 2019


This paper examines the deterrence properties of aggregate litigation and class actions. In the multiple victim scenario, the probability that an individual victim will sue falls toward zero with geometric decay as the number of victims increases. The reason is that the incentive to free ride increases with the number of victims. Undercompliance is observed, which worsens with the number of victims. Compliance is never socially optimal, and the shortfall from optimality increases with the number of victims. These results, which continue to hold even if litigating victims anticipate being joined in a single forum, suggest a more nuanced and potentially more robust justification for the class action than has hitherto been provided. Implications for collusive settlements of class action litigation are discussed.

Keywords: class action, aggregate litigation, positive value claims, negative value claims, deterrence, legal compliance, litigation, joinder, limited fund, monitoring class actions, opting out

JEL Classification: K40, K41, K42, K22, D74

Suggested Citation

Hylton, Keith N., Deterrence and Aggregate Litigation (March 1, 2019). Boston Univ. School of Law, Law and Economics Research Paper No. 17-45, Available at SSRN:

Keith N. Hylton (Contact Author)

Boston University - School of Law ( email )

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