The Economics of US-style Contingent Fees and UK-style Conditional Fees

Winand Emons and Nuno Garoupa

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: Under contingent fees the attorney gets a share of the judgement; under conditional fees the lawyer gets an upscale premium if the case is won which is, however, unrelated to the adjudicated amount. We compare conditional and contingent fees in a principal-agent framework where the lawyer chooses unobservable effort after she has observed the amount at stake. Contingent fees provide better incentives than conditional fees independently of whether upfront payments are restricted to be non-negative or not. Under contingent fees the attorney uses her information about what is at stake more efficiently

Keywords: contingent fees; conditional fees; moral hazard; incentives (search for similar items in EconPapers)
JEL-codes: D82 K1 (search for similar items in EconPapers)
Date: 2004-05
New Economics Papers: this item is included in nep-eec and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: The Economics of US-Style Contingent Fees and UK-Style Conditional Fees (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp0407

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