“Piggyback” Lawsuits and Deterrence: Can Frivolous Litigation Improve Welfare?

Thomas Miceli and Michael Stone

No 2013-16, Working papers from University of Connecticut, Department of Economics

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 examines 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)
Pages: 34 pages
Date: 2013-07
New Economics Papers: this item is included in nep-law
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Related works:
Journal Article: “Piggyback” lawsuits and deterrence: Can frivolous litigation improve welfare? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2013-16

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