Distributing Attorney Fees in Multidistrict Litigation
Journal of Legal Analysis
36 Pages Posted: 29 Aug 2018 Last revised: 30 Dec 2020
Date Written: December 29, 2020
As consolidated multidistrict litigation (MDL) has come to dominate the federal civil docket, the problem of how to divide attorney fees among participating firms has become the source of frequent and protracted litigation. For example, in the NFL Concussion Litigation, the judge awarded the plaintiff attorneys over $100 million in fees, but the division of those fees among the 26 firms involved sparked two additional years of litigation. In this Essay, we explore solutions to this fee division problem, drawing insights from the economics, game theory, and industrial organization literatures. Ultimately, we propose a novel division method based on peer reports. Participating firms assess the relative contribution of other firms to the litigation, and then optimization or Bayesian techniques arrive at a consensus or compromise fee allocation. Our methods are intuitively easy to understand, enable broad participation, and are resistant to collusion or other strategic behavior, making them likely to be accepted by the firms involved. Our Essay thus provides courts with an important mediation tool or decision rule for these fee division disputes.
Keywords: Attorney Fees, Fair Division, Lodestar, Complex Litigation, Mass Torts, Bayesian Methods, Optimization
JEL Classification: C11, C61
Suggested Citation: Suggested Citation