“Piggyback” lawsuits and deterrence: Can frivolous litigation improve welfare?

Thomas J. Miceli and Michael Stone

International Review of Law and Economics, 2014, vol. 39, issue C, 49-57

Abstract: Previous literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect deterrence. This paper considers whether there are circumstances under which frivolous suits might actually increase deterrence, and thereby possibly improve welfare. The reason this is possible is that in a costly legal system, injurers will generally be underdeterred because they will ignore the litigation costs of plaintiffs. The fact that some uninjured plaintiffs will succeed in obtaining settlements may therefore affect the care and activity choices of injurers in a socially valuable way.

Keywords: Frivolous lawsuits; Care; Activity level; Deterrence (search for similar items in EconPapers)
JEL-codes: K13 K41 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Working Paper: “Piggyback” Lawsuits and Deterrence: Can Frivolous Litigation Improve Welfare? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:39:y:2014:i:c:p:49-57

DOI: 10.1016/j.irle.2014.05.003

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