 The Impact of Frivolous Lawsuits on Deterrence: Do They Have Some Redeeming Value?Michael Stone and Thomas Miceli No 2013-26, Working papers from University of Connecticut, Department of Economics Abstract: The literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect the decisions of potential injurers. This paper asks whether there are circumstances under which frivolous suits might actually increase social welfare by inducing parties engaged in risk activities to limit the scale, and improve the safety, of those activities. The reason this is possible is that in a costly legal system, injurers will generally underinvest in safety and overengage in the activity. The fact that some uninjured plaintiffs succeed in obtaining settlements may therefore affect the care and activity choices of injurers in a socially valuable way. In light of these conclusions, the paper goes on to examine the desirability of various policies aimed at curbing frivolous litigation. Keywords: Frivolous lawsuits; care; activity level; deterrence (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2013-26 Access Statistics for this paper More papers in Working papers from University of Connecticut, Department of Economics University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063. Contact information at EDIRC. |
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