Shifting Plaintiffs' Fees Versus Increasing Damage Awards

12 Pages Posted: 24 Jul 2007 Last revised: 27 Aug 2010

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: January 1993

Abstract

Shifting successful plaintiffs' fees to defendants and increasing damage awards are alternative ways to achieve similar results: increasing plaintiffs' incentives to sue and raising defendants' expected payments. This paper shows that relying on higher damage awards is more efficient than shifting plaintiffs' fees. The reason is that fee-shifting is, perversely, more valuable for plaintiffs with higher litigation costs. Thus, it is possible to substitute higher damage awards for fee-shifting in a manner that leaves deterrence unaffected while eliminating the suits of plaintiffs with the highest litigation costs.

Suggested Citation

Kaplow, Louis, Shifting Plaintiffs' Fees Versus Increasing Damage Awards (January 1993). NBER Working Paper No. w4263. Available at SSRN: https://ssrn.com/abstract=478708

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