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Litigation with Legal Aid versus Litigation with Contingent/Conditional Fees

Author

Listed:
  • Lambert Eve-Angéline

    (University of Besançon and CRESE)

  • Chappe Nathalie

    (University of Besançon and CRESE)

Abstract

In the last few years, legal aid has been much debated, especially in the European Union. Our aim is to determine in a tort litigation model the impact of legal aid upon plaintiffs’ decision whether to sue, plaintiffs’ level of expenses at trial and the level of deterrence of potential injurers. We study the two most common types of legal aid: fixed and proportional. Whatever the system, we show that increasing legal aid induces more cases filed and more deterrence (fewer accidents). Then we compare these incentives with those given by the contingent/conditional fees systems. We show that the incentives to bring suit are higher in the contingent/conditional fees systems, but incentives to take care are higher with legal aid since legal expenses from the plaintiff are higher.

Suggested Citation

  • Lambert Eve-Angéline & Chappe Nathalie, 2014. "Litigation with Legal Aid versus Litigation with Contingent/Conditional Fees," Review of Law & Economics, De Gruyter, vol. 10(1), pages 95-115, March.
    • Handle: RePEc:bpj:rlecon:v:10:y:2014:i:1:p:21:n:4
    DOI: 10.1515/rle-2013-0028
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    References listed on IDEAS

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    1. Neil Rickman & Paul Fenn & Alastair Gray, 1999. "The reform of Legal Aid in England and Wales," Fiscal Studies, Institute for Fiscal Studies, vol. 20(3), pages 261-286, September.
    2. Hugh Gravelle & Nuno Garoupa, 2002. "Optimal Deterrence with Legal Defense Expenditure," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 366-379, July.
    3. Miceli, Thomas J & Segerson, Kathleen, 1991. "Contingent Fees for Lawyers: The Impact on Litigation and Accident Prevention," The Journal of Legal Studies, University of Chicago Press, vol. 20(2), pages 381-399, June.
    4. Miceli, Thomas J, 1994. "Do Contingent Fees Promote Excessive Litigation?," The Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 211-224, January.
    5. Gray, Alastair M, 1994. "The Reform of Legal Aid," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 10(1), pages 51-67, Spring.
    6. Heyes, Anthony & Rickman, Neil & Tzavara, Dionisia, 2004. "Legal expenses insurance, risk aversion and litigation," International Review of Law and Economics, Elsevier, vol. 24(1), pages 107-119, March.
    7. Gravelle, H. S. E., 1990. "Rationing trials by waiting: Welfare implications," International Review of Law and Economics, Elsevier, vol. 10(3), pages 255-270, December.
    8. repec:bla:econom:v:71:y:2004:i:283:p:493-500 is not listed on IDEAS
    9. Patricia Munch Danzon, 1983. "Contingent Fees for Personal Injury Litigation," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 213-224, Spring.
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    Citations

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    Cited by:

    1. Yannick Gabuthy & Pierre-Henri Morand, 2019. "Lawyer Fee Arrangements and Litigation Outcomes: An Auction-Theoretic Perspective," Working Papers of BETA 2019-03, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Julia Shamir & Noam Shamir, 2021. "Third-party funding in a sequential litigation process," European Journal of Law and Economics, Springer, vol. 52(1), pages 169-202, August.

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