Expertise, Contingent Fees, and Excessive Litigation

Winand Emons

No 1487, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Plaintiffs have either strong or weak cases. Both cases should be taken to court, yet weak cases need more work by the attorney than strong cases. Only the attorney knows whether a case needs additional work or not; the plaintiff is forced to rely on the attorney’s recommendation. We show that under contingent fees there will generally be excessive litigation. In contrast, an hourly fee implements the efficient amount of litigation.

Keywords: Contingent Fees; Expert Services; Incentives; Litigation (search for similar items in EconPapers)
JEL-codes: D82 K41 (search for similar items in EconPapers)
Date: 1996-10
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Working Paper: Expertise, Contingent Fees, and Excessive Litigation (1996)
Working Paper: Expertise, Contingent Fees, and Excessive Litigation (1996)
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