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Free choice of legal fee shifting rules?

Author

Listed:
  • Christian Schwab
  • Hin-Yue Tang
  • Stefan Winter
Abstract
In every country in the world parties to private litigation are subject to a predetermined fee shifting regime. While there are no institutionalized opt-out provisions so far, we demonstrate that such provisions could improve welfare. We argue that private negotiations are not a viable alternative to such opt-out provisions. We derive the conditions under which welfare improvements occur and suggest an applicable design for such an opt-out scheme. Copyright Springer Science+Business Media, LLC 2014

Suggested Citation

  • Christian Schwab & Hin-Yue Tang & Stefan Winter, 2014. "Free choice of legal fee shifting rules?," European Journal of Law and Economics, Springer, vol. 37(2), pages 299-324, April.
    • Handle: RePEc:kap:ejlwec:v:37:y:2014:i:2:p:299-324
    DOI: 10.1007/s10657-011-9296-x
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    References listed on IDEAS

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    10. Jue-Shyan Wang, 2007. "Fee-Shifting Rules in Litigation with Contingency Fees," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 23(3), pages 519-546, October.
    11. Katz, Avery, 1987. "Measuring the Demand for Litigation: Is the English Rule Really Cheaper?," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 143-176, Fall.
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    Cited by:

    1. Doménech-Pascual, Gabriel & Martínez-Matute, Marta & Mora-Sanguinetti, Juan S., 2021. "Do fee-shifting rules affect plaintiffs’ win rates? A theoretical and empirical analysis," International Review of Law and Economics, Elsevier, vol. 65(C).
    2. Ayouni, Mehdi & Friehe, Tim & Gabuthy, Yannick, 2020. "Opting for the English rule: On the contractual re-allocation of legal fees," International Review of Law and Economics, Elsevier, vol. 63(C).

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    More about this item

    Keywords

    Fee shifting; American rule; English rule; Winner rule; Opt-out provision; K40; K41;
    All these keywords.

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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