Financially-Constrained Lawyers

Claudia Landeo and Maxim Nikitin
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Maxim Nikitin: International College of Economics and Finance, NRU HSE

No 52, Working Papers from Peruvian Economic Association

Abstract: Financial constraints reduce the lawyers' ability to file lawsuits and bring cases to trial. As a result, access to justice for true victims, bargaining impasse, and care-taking incentives for potential injurers might be affected. We present the first cradle-to-grave model of legal disputes involving financially-constrained lawyers, third-party lawyer lending, and asymmetric information. In equilibrium, access to justice is denied to some true victims and bargaining impasse occurs. We demonstrate that policies that relax lawyers' financial constraints might be welfare reducing if the positive impact on access to justice is weak and the potential injurers are overdeterred.

Keywords: Access to Justice; Social Welfare; Lawsuits; Litigation; Deterrence; Third-Party Litigation Funding; Third-Party Lawyer Lending Industry; Bargaining; Asymmetric Information (search for similar items in EconPapers)
JEL-codes: C70 D82 K41 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-cta, nep-exp, nep-gth and nep-hrm
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Related works:
Working Paper: Financially-Constrained Lawyers (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:apc:wpaper:2015-052

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