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European Journal of Law and Economics

, Volume 24, Issue 1, pp 1–13 | Cite as

Investigating the determinants of pretrial settlement rates: contingent versus non-contingent lawyers’ fees

  • Alberto Casagrande
  • Marco Spallone
Article
  • 52 Downloads

Abstract

In this article, we explore the possibility that the percentage of litigations settled outside of court is affected by the degree of contingency of lawyers’ fees. In our view, a litigation is a game where not only the plaintiff and the defendant, but also their lawyers are independent players. The main consequence of this assumption is that the authority to settle is allocated endogenously to either the clients or their lawyers, depending on the value of the relevant parameters. In this game theoretical setup, (1) we compare the incentives to settle provided by contingent and non-contingent lawyers’ fees, and (2) we state the conditions under which settlement is more likely to happen.

Keywords

Pretrial settlement  Lawyers' fees 

JEL Classification

K0 K4 

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Notes

Acknowledgment

We wish to thank Nuno Garupa for his useful suggestions. All errors remain ours.

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.LUISS-Guido Carli University of RomeRomeItaly
  2. 2.G. D′Annunzio University of Chieti and PescaraPescaraItaly

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