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Subrogation and its consequences for tort litigation

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  • Spurr, Stephen J.

Abstract

In the U.S. tort recoveries of personal injury victims are now fully subject to subrogation claims by public and private health insurers who have previously covered the victim's health care expenses. We use an extensive-form game to model decisions that must be made by insurers when their insured party has been injured and sues for damages. If the insurer decides to join the lawsuit, it must decide how much, if anything, it will contribute to the legal expenses of the plaintiff.

Suggested Citation

  • Spurr, Stephen J., 2021. "Subrogation and its consequences for tort litigation," International Review of Law and Economics, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:irlaec:v:67:y:2021:i:c:s0144818821000260
    DOI: 10.1016/j.irle.2021.106002
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    References listed on IDEAS

    as
    1. A Mitchell Polinsky & Steven Shavell, 2018. "Subrogation and the Theory of Insurance When Suits Can Be Brought for Losses Suffered," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 34(4), pages 619-649.
    2. Kenneth S. Reinker & David Rosenberg, 2007. "Unlimited Subrogation: Improving Medical Malpractice Liability by Allowing Insurers to Take Charge," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 261-289, June.
    3. Winand Emons, 2007. "Conditional versus contingent fees," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 89-101, January.
    4. Sykes, Alan O, 2001. "Subrogation and Insolvency," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 383-399, Part I Ju.
    5. David Schap & Andrew Feeley, 2008. "The Collateral Source Rule: Statutory Reform and Special Interests," Cato Journal, Cato Journal, Cato Institute, vol. 28(1), pages 83-99, Winter.
    6. David Schap & Kayla Horan & Andrew Feeley, 2017. "Statutory Modification of the Collateral Source Rule," Working Papers 1710, College of the Holy Cross, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Subrogation; Contingent fee; American rule; English rule;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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