The Simple Economics of Class Action: Private Provision of Club and Public Goods
Alberto Cassone and
Giovanni Ramello ()
IEL Working Papers from Institute of Public Policy and Public Choice - POLIS
This article uses economic categories to show how the reorganisation of civil procedure in the case of class action is not merely aimed at providing a more efficient litigation technology, as hierarchies (and company law) might do for other productive activities, but that it also serves to create a well defined economic organization ultimately aimed at producing a set of goods, first and foremost among which are justice and efficiency. Class action has the potential to recreate, in the judicial domain, the same effects that individual interests and motivations, governed by the perfect competition paradigm, bring to the market. Moreover, through economic analysis it is possible to rediscover not only the productive function of this legal machinery, but also that partial compensation of victims and large profits for the class counsel, far from being a side-effect, are actually a necessary condition for reallocation of the costs and risks associated with the legal action.
Keywords: class action; collective litigation; mass tort; club; liability; deterrence (search for similar items in EconPapers)
JEL-codes: K41 D71 D74 K13 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
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Journal Article: The simple economics of class action: private provision of club and public goods (2011)
Working Paper: The Simple Economics of Class Action: Private Provision of Club and Public Goods (2011)
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Persistent link: http://EconPapers.repec.org/RePEc:uca:ucaiel:3
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