In this paper we consider the potential effects that the application of a loser-pays-all rule may have on criminal litigation, including the decision to prosecute, criminal deterrence and legal error. We find that the effects of fee shifting on deterrence and on miscarriage of justice go in opposite directions. We also look at the effects of this rule on the rate of settlements (plea-bargaining) and when one party is wealth-constrained. We apply the insights of our model to current policy discussions such as the use of RICO proceedings and the financing of enforcement authorities in the United States.
Luciana Echazu and Nuno Garoupa. "Why Not Adopt a Loser-Pays-All Rule in Criminal Litigation?" International Review of Law and Economics
Vol. 32 Iss. 2 (2012) p. 233 - 241
Available at: http://works.bepress.com/nunogaroupa/64/