IDEAS home Printed from https://ideas.repec.org/a/mhr/jinste/urnsici0932-4569(201603)1721_75caocaa_2.0.tx_2-1.html
   My bibliography  Save this article

Cost-Benefit Analysis of Class Actions: An Israeli Perspective

Author

Listed:
  • Alon Klement
  • Keren Weinshall-Margel

Abstract

We propose an analytical framework for evaluating the effectiveness of class actions, in which their costs are estimated against the benefits they produce in attaining three objectives: law enforcement and deterrence; access to courts; and compensation. We outline parameters for measuring the social costs and benefits relevant to these objectives and evaluate them for Israeli class actions, based on original data including all class actions filed between 2006 and 2012 (n = 2,056). Findings indicate that class actions did not substantially facilitate access to courts and compensation, and that they had limited success in realizing law enforcement and deterrence.

Suggested Citation

  • Alon Klement & Keren Weinshall-Margel, 2016. "Cost-Benefit Analysis of Class Actions: An Israeli Perspective," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(1), pages 75-103, March.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201603)172:1_75:caocaa_2.0.tx_2-1
    DOI: 10.1628/093245613X14472269022780
    as

    Download full text from publisher

    File URL: https://www.mohrsiebeck.com/en/article/cost-benefit-analysis-of-class-actions-an-israeli-perspective-101628093245616x14472269022780
    Download Restriction: Fulltext access is included for subscribers to the printed version.
    File URL: https://libkey.io/10.1628/093245613X14472269022780?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eric Helland & Jonathan Klick, 2007. "The Effect of Judicial Expedience on Attorney Fees in Class Actions," The Journal of Legal Studies, University of Chicago Press, vol. 36(1), pages 171-187, January.
    2. Stephen J. Choi, 2007. "Do the Merits Matter Less After the Private Securities Litigation Reform Act?," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 23(3), pages 598-626, October.
    3. Theodore Eisenberg & Christoph Engel, 2014. "Assuring Civil Damages Adequately Deter: A Public Good Experiment," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(2), pages 301-349, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christoph Engel & Urs Schweizer, 2016. "Beyond Privity 33rd International Seminar on the New Institutional Economics June 10-13, 2015, Edinburgh, United Kingdom," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(1), pages 1-4, March.
    2. Michael Heise, 2016. "Assessing Assessments of Israel's 2006 Class Action Law," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(1), pages 108-112, March.
    3. Christoph Engel & Alon Klement & Karen Weinshall Margel, 2017. "Diffusion of Legal Innovations: The Case of Israeli Class Actions," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2017_11, Max Planck Institute for Research on Collective Goods, revised Jan 2018.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yannick Gabuthy & Eve-Angéline Lambert, 2018. "Legal Advertising and Frivolous Lawsuits," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 174(3), pages 570-593, September.
    2. Billings, Mary Brooke & Cedergren, Matthew C., 2015. "Strategic silence, insider selling and litigation risk," Journal of Accounting and Economics, Elsevier, vol. 59(2), pages 119-142.
    3. Humphery-Jenner, M., 2011. "Internal and External Discipline Following Securities Class Actions," Discussion Paper 2011-044, Tilburg University, Center for Economic Research.
    4. Kempf, Elisabeth & Spalt, Oliver G., 2020. "Attracting the Sharks: Corporate Innovation and Securities Class Action Lawsuits," CEPR Discussion Papers 14358, C.E.P.R. Discussion Papers.
    5. Humphery-Jenner, Mark L., 2012. "Internal and external discipline following securities class actions," Journal of Financial Intermediation, Elsevier, vol. 21(1), pages 151-179.
    6. Dan Amiram & Zahn Bozanic & James D. Cox & Quentin Dupont & Jonathan M. Karpoff & Richard Sloan, 2018. "Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature," Review of Accounting Studies, Springer, vol. 23(2), pages 732-783, June.
    7. Christoph Engel & Rima Maria Rahal, 2020. "What the Judge Argues is Not What the Judge Thinks - Eye Tracking Evidence about the Normative Weight of Conflicting Concerns in a Torts Case," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2020_03, Max Planck Institute for Research on Collective Goods, revised 01 Mar 2021.
    8. Brian L. Connelly & Wei Shi & Jinyong Zyung, 2017. "Managerial response to constitutional constraints on shareholder power," Strategic Management Journal, Wiley Blackwell, vol. 38(7), pages 1499-1517, July.
    9. Stephen J. Choi & Karen K. Nelson & A. C. Pritchard, 2009. "The Screening Effect of the Private Securities Litigation Reform Act," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 6(1), pages 35-68, March.
    10. Joshua Cutler & Angela K. Davis & Kyle Peterson, 2019. "Disclosure and the outcome of securities litigation," Review of Accounting Studies, Springer, vol. 24(1), pages 230-263, March.
    11. Cécile Carpentier & Douglas Cumming & Jean‐Marc Suret, 2012. "The Value of Capital Market Regulation: IPOs Versus Reverse Mergers," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 9(1), pages 56-91, March.
    12. Deffains, Bruno & Espinosa, Romain & Fluet, Claude, 2019. "Laws and norms: Experimental evidence with liability rules," International Review of Law and Economics, Elsevier, vol. 60(C).
    13. Stephen J. Choi, 2011. "Motions for Lead Plaintiff in Securities Class Actions," The Journal of Legal Studies, University of Chicago Press, vol. 40(1), pages 205-244.
    14. Guerra Alice & Parisi Francesco, 2022. "Injurers versus Victims: (A)Symmetric Reactions to Symmetric Risks," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 22(2), pages 603-620, June.
    15. Paul G. Mahoney, 2009. "The Development of Securities Law in the United States," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 325-347, May.
    16. Wei Shi & Brian L. Connelly & Wm. Gerard Sanders, 2016. "Buying bad behavior: Tournament incentives and securities class action lawsuits," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1354-1378, July.
    17. Pieter T. M. Desmet & Franziska Weber, 2022. "Infringers’ willingness to pay compensation versus fines," European Journal of Law and Economics, Springer, vol. 53(1), pages 63-80, February.
    18. Dalla Pellegrina, Lucia & Saraceno, Margherita, 2011. "Securities class actions in the US banking sector: Between investor protection and bank stability," Journal of Financial Stability, Elsevier, vol. 7(4), pages 215-227, December.
    19. De Mot, Jef & Faure, Michael & Klick, Jonathan, 2015. "Appellate caseload and the switch to comparative negligence," International Review of Law and Economics, Elsevier, vol. 42(C), pages 147-156.
    20. Thomas Ulen, 2011. "An introduction to the law and economics of class action litigation," European Journal of Law and Economics, Springer, vol. 32(2), pages 185-203, October.

    More about this item

    JEL classification:

    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(201603)172:1_75:caocaa_2.0.tx_2-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Wolpert (email available below). General contact details of provider: https://www.mohrsiebeck.com/jite .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.