Disregarding the Attorney's Advice: An Agency Perspective

Aaron Finkle () and Dongsoo Shin ()

Review of Law & Economics, 2010, vol. 6, issue 2, 197-217

Abstract: Using an agency model, we study the contract between a plaintiff and an attorney. The plaintiff hires the attorney to investigate the case and provide advice as to the profitability of trial versus accepting a defendant's settlement offer. The attorney's investigation is costly and remains unverified if the plaintiff accepts settlement. Thus, the attorney has an incentive to suggest settlement without investigating the case. Our analysis reveals that the plaintiff sometimes proceeds with trial against the attorney's advice to accept the settlement offer despite knowing the attorney's advice to be accurate. Furthermore, when the plaintiff cannot commit to a trial/settlement strategy, disregarding the attorney's advice may take place more frequently. We also show that with larger settlement offers, the plaintiff pursues trial more often.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.2202/1555-5879.1414 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
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: https://EconPapers.repec.org/RePEc:bpj:rlecon:v:6:y:2010:i:2:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rle/html

DOI: 10.2202/1555-5879.1414

Access Statistics for this article

Review of Law & Economics is currently edited by Francesco Parisi

More articles in Review of Law & Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().