Sequential trials and the English rule

The allocation of trial costs and the way a trial progresses are two important issues in civil procedure. The combination of these two elements has received relatively little attention in the law and economics literature. The prior literature has only compared unitary litigation (e.g. liability and damage issues are litigated, after which the court decides on both issues) under the American rule with sequential litigation (e.g. the parties first litigate the liability issue after which the court makes a decision, and then if still necessary the parties litigate the damages issue) under the American rule. In this article, I examine the influence of sequential litigation when the loser at trial pays all the litigation costs and compare the results with (a) the situation in which litigation is unitary and the loser pays all the litigation costs and (b) the situation in which litigation is sequential and each party bears her own costs. I focus on the incentive to sue, the incentive to settle (or to litigate) and on the settlement amount. Some interesting differences with the previous literature are discussed in detail

Assessing Needs of Care in European Nations. ENEPRI Policy Brief No. 14, 28 December 2012

This Policy Brief presents the research questions, main results and policy implications and recommendations of the seven Work Packages that formed the basis of the ANCIEN research project, financed under the 7th EU Research Framework Programme of the European Commission. Carried out over a 44-month period and involving 20 partners from EU member states, the project principally concerns the future of long-term care (LTC) for the elderly in Europe and addresses two questions in particular: How will need, demand, supply and use of LTC develop? How do different systems of LTC perform

Comparing third party financing of litigation versus legal expenses insurance

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Whistle blowing

For law enforcement purposes corruption and fraud are hard battles. Because of the highly secretive and premeditated nature of these crimes, prime witnesses are themselves often implicated in the fraudulent transaction. Promises of immunity and whistle blowing rewards are often required to resolve these information asymmetries. These insights have set a trend, both in scholarship and law enforcement practice, towards reward-based approaches (carrots), as an alternative or complement to punishment based deterrence (sticks). Applying the U.S. False Claims Act (FCA) as an analytical framework, we provide a critical review of the efficiency limitations of whistle blowing. More specifically, the formal model developed in this contribution, reveals a gap between social and private incentives in whistle blowing, both with regard to the decision to pursue litigation and the timing of whistle blowing. First, while an insider will blow the whistle whenever his expected recovery exceeds the expected costs of litigation, enforcement agencies seek to optimise enforcement in the long run. The autonomy of whistle blowers to pursue claims without government involvement, weakens the government’s bargaining position and obstructs the government’s ability to weigh in wider factors of enforcement (the effect of an individual case on a multiple claim suit, etc.). Second, whenever rewards are tied to recovery, bounty awards create a perverse incentive whereby fraudulent practices are not terminated at a socially optimal point in time. The potential race among whistle blowers cannot mitigate this effect fully because the stigma and loss of opportunities on the job market act as internal constraints on whistle blowing