A Solution to the Problem of Nuisance Suits: The Option to Have the Court Bar Settlement

10 Pages Posted: 20 Nov 2004

See all articles by David Rosenberg

David Rosenberg

Harvard Law School

Steven Shavell

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

Date Written: August 2004

Abstract

A solution to a broad category of nuisance suits is examined in this paper. The solution is to give defendants the option to have courts prevent settlements (by refusing to enforce them). Then, if a defendant knows he is facing a plaintiff who would not be willing to go to trial, the defendant would exercise his option to bar settlement, forcing the plaintiff to withdraw. And because the plaintiff would anticipate this, he would not bring his nuisance suit in the first place.

JEL Classification: D8, K41

Suggested Citation

Rosenberg, Michael and Shavell, Steven, A Solution to the Problem of Nuisance Suits: The Option to Have the Court Bar Settlement (August 2004). Harvard Law and Economics Discussion Paper No. 489. Available at SSRN: https://ssrn.com/abstract=623285 or http://dx.doi.org/10.2139/ssrn.623285

Michael Rosenberg (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-496-4558 (Phone)
617-495-1110 (Fax)

Steven Shavell

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-495-3668 (Phone)
617-496-2256 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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