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Article
Fee-Shifting Rules in Litigation with Contingency Fees
Journal Law Economics and Organization (2007)
  • Kong-Pin Chen
Abstract

This article theoretically compares the British and American fee-shifting rules in their influences on the behavior of the litigants and the outcomes of litigation. We build up a comprehensive litigation model with asymmetric information and agency costs, which makes it possible to make comparison on a broad arrays of issues in a single unified framework. We then solve for the equilibria under both American and British rules, and thereby compare their equilibrium settlement amounts and rates, expenditures incurred in trials, as well as the plaintiff’s chances of winning and incentive to sue. The theoretical results are broadly consistent with existing empirical evidence. 1. Introduction

Keywords
  • contingency fees,
  • litigation,
  • English rule,
  • American Rule
Publication Date
2007
Citation Information
Kong-Pin Chen. "Fee-Shifting Rules in Litigation with Contingency Fees" Journal Law Economics and Organization (2007)
Available at: http://works.bepress.com/kong_ping_chen/2/