IDEAS home Printed from https://ideas.repec.org/p/uct/uconnp/2013-16.html
   My bibliography  Save this paper

“Piggyback” Lawsuits and Deterrence: Can Frivolous Litigation Improve Welfare?

Author

Listed:
  • Thomas J. Miceli

    (University of Connecticut)

  • Michael P. Stone

    (Quinnipiac University)

Abstract

Previous literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect deterrence. This paper examines whether there are circumstances under which frivolous suits might actually increase deterrence, and thereby possibly improve welfare. The reason this is possible is that in a costly legal system, injurers will generally be underdeterred because they will ignore the litigation costs of plaintiffs. The fact that some uninjured plaintiffs will succeed in obtaining settlements may therefore affect the care and activity choices of injurers in a socially valuable way.

Suggested Citation

  • Thomas J. Miceli & Michael P. Stone, 2013. "“Piggyback” Lawsuits and Deterrence: Can Frivolous Litigation Improve Welfare?," Working papers 2013-16, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2013-16
    as

    Download full text from publisher

    File URL: https://media.economics.uconn.edu/working/2013-16.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hylton, Keith N., 1990. "The influence of litigation costs on deterrence under strict liability and under negligence," International Review of Law and Economics, Elsevier, vol. 10(2), pages 161-171, September.
    2. Lucian Arye Bebchuk, 1998. "Negative Expected Value Suits," NBER Working Papers 6474, National Bureau of Economic Research, Inc.
    3. Bebchuk, Lucian Arye & Chang, Howard F, 1996. "An Analysis of Fee Shifting Based on the Margin of Victory: On Frivolous Suits, Meritorious Suits, and the Role of Rule 11," The Journal of Legal Studies, University of Chicago Press, vol. 25(2), pages 371-403, 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. Craswell, Richard & Calfee, John E, 1986. "Deterrence and Uncertain Legal Standards," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(2), pages 279-303, Fall.
    6. Shavell, Steven, 1985. "Uncertainty over Causation and the Determination of Civil Liability," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 587-609, October.
    7. Miceli, Thomas J., 1993. "Optimal deterrence of nuisance suits by repeat defendants," International Review of Law and Economics, Elsevier, vol. 13(2), pages 135-144, June.
    8. Katz, Avery, 1990. "The effect of frivolous lawsuits on the settlement of litigation," International Review of Law and Economics, Elsevier, vol. 10(1), pages 3-27, May.
    9. Rosenberg, D. & Shavell, S., 1985. "A model in which suits are brought for their nuisance value," International Review of Law and Economics, Elsevier, vol. 5(1), pages 3-13, June.
    10. Bebchuk, Lucian Arye, 1988. "Suing Solely to Extract a Settlement Offer," The Journal of Legal Studies, University of Chicago Press, vol. 17(2), pages 437-450, June.
    11. Hylton, Keith N, 1990. "Costly Litigation and Legal Error under Negligence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(2), pages 433-452, Fall.
    12. Polinsky, A Mitchell & Rubinfeld, Daniel L, 1988. "The Welfare Implications of Costly Litigation for the Level of Liability," The Journal of Legal Studies, University of Chicago Press, vol. 17(1), pages 151-164, January.
    13. Bebchuk, Lucian Arye, 1996. "A New Theory Concerning the Credibility and Success of Threats to Sue," The Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 1-25, January.
    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. 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. Cary Deck & Paul Pecorino & Michael Solomon, 2024. "Litigation with negative expected value suits: An experimental analysis," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 21(2), pages 244-278, June.

    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. Beckner, Clinton III & Katz, Avery, 1995. "The incentive effects of litigation fee shifting when legal standards are uncertain," International Review of Law and Economics, Elsevier, vol. 15(2), pages 205-224, June.
    2. Farmer, Amy & Pecorino, Paul, 1998. "A reputation for being a nuisance: frivolous lawsuits and fee shifting in a repeated play game," International Review of Law and Economics, Elsevier, vol. 18(2), pages 147-157, June.
    3. Giuseppe Dari-Mattiacci & Bruno Deffains, 2007. "Uncertainty of Law and the Legal Process," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(4), pages 627-656, December.
    4. Farmer Amy & Pecorino Paul, 2014. "Litigation with Default Judgments," Review of Law & Economics, De Gruyter, vol. 10(2), pages 117-136, July.
    5. Guha, Brishti, 2016. "Malicious litigation," International Review of Law and Economics, Elsevier, vol. 47(C), pages 24-32.
    6. Margherita Saraceno, 2018. "Justice: Greater Access, Lower Costs," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(2), pages 283-312, July.
    7. Antill, Samuel & Grenadier, Steven R., 2023. "Financing the litigation arms race," Journal of Financial Economics, Elsevier, vol. 149(2), pages 218-234.
    8. Cary Deck & Paul Pecorino & Michael Solomon, 2024. "Litigation with negative expected value suits: An experimental analysis," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 21(2), pages 244-278, June.
    9. Stone, Michael P. & Miceli, Thomas J., 2012. "Optimal attorney advertising," International Review of Law and Economics, Elsevier, vol. 32(3), pages 329-338.
    10. Kirstein, Roland & Schmidtchen, Dieter, 1997. "Judicial detection skill and contractual compliance," International Review of Law and Economics, Elsevier, vol. 17(4), pages 509-520, December.
    11. Landeo, Claudia M. & Nikitin, Maxim, 2018. "Financially-constrained lawyers: An economic theory of legal disputes," Games and Economic Behavior, Elsevier, vol. 109(C), pages 625-647.
    12. Dari-Mattiacci, Giuseppe & Saraceno, Margherita, 2020. "Fee shifting and accuracy in adjudication," International Review of Law and Economics, Elsevier, vol. 63(C).
    13. He, Leshui, 2020. "A theory of pre-filing settlement and patent assertion entities," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    14. Lucian Arye Bebchuk, 1998. "Negative Expected Value Suits," NBER Working Papers 6474, National Bureau of Economic Research, Inc.
    15. Albert Choi & Chris William Sanchirico, 2004. "Should Plaintiffs Win What Defendants Lose? Litigation Stakes, Litigation Effort, and the Benefits of Decoupling," The Journal of Legal Studies, University of Chicago Press, vol. 33(2), pages 323-354, June.
    16. Kim, Iljoong & Kim, Jaehong, 2015. "Frivolous Suits In The Infinitely-Repeated Litigation Game With Uncertainty," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(1), pages 21-33, June.
    17. Cedomir GLIGORIC & Milos PAVLOVIC & Jana CVIJIC RODIC & Sanja DONCIC & Nikola VUJANOVIC, 2023. "Some Aspects of Economic Analysis of Out-of-court Settlement in the Dispute of Negative Expected Value – Case of Republic of Serbia," Business & Management Compass, University of Economics Varna, issue 1, pages 80-95.
    18. Steven Shavell, 2005. "Liability for Accidents," NBER Working Papers 11781, National Bureau of Economic Research, Inc.
    19. Daniela Marchesi, 2007. "The Rule Incentives that Rule Civil Justice," ISAE Working Papers 85, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    20. Schaufele, Brandon, 2022. "Chilling Effects from Anti-SLAPP Laws," MPRA Paper 113740, University Library of Munich, Germany.

    More about this item

    Keywords

    Frivolous lawsuits; care; activity level; deterrence;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:uct:uconnp:2013-16. 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: Mark McConnel (email available below). General contact details of provider: https://edirc.repec.org/data/deuctus.html .

    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.