Economics at your fingertips  

On Lawyer Compensation When Appeals Are Possible

At Christian (), Tim Friehe and Gabuthy Yannick ()
Additional contact information
At Christian: CRESE (University of Franche-Comté); 45, Avenue de l’Observatoire, 25030Besançon, France
Gabuthy Yannick: BETA (CNRS, University of Strasbourg, University of Lorraine); 13, Place Carnot, C.O. 70026, 54035Nancy, France

The B.E. Journal of Economic Analysis & Policy, 2019, vol. 19, issue 2, 11

Abstract: This paper describes how plaintiff should compensate lawyers, who choose unobservable effort, when litigation may proceed from the trial to the appeals court. We find that, when it is very likely that the defendant will appeal, transfers made to the lawyer only after an appeals court’s ruling are key instruments in incentivizing both trial and appeal court effort. Indeed, the lawyer may not receive any transfer after the trial court’s ruling. In contrast, when reaching the appeals stage is unlikely, a favorable trial court ruling triggers a positive transfer to the lawyer and first-best appeals effort. In our setup, the lawyer may receive a lower transfer after winning in both the trial and the appeals court as compared to the scenario in which the first-instance court ruled against the plaintiff and the appeals court reversed that ruling.

Keywords: litigation; appeals; moral hazard; optimal contract (search for similar items in EconPapers)
JEL-codes: D82 K41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... -0273.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: On Lawyer Compensation When Appeals Are Possible (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

Page updated 2019-06-17
Handle: RePEc:bpj:bejeap:v:19:y:2019:i:2:p:11:n:12