The use of most-favored-nation clauses in settlement of litigation

• 成果类型: Article
• 署名作者: Spier, KE
• 署名单位: Northwestern University; National Bureau of Economic Research
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.2307/3087444
• 发表日期: 2003
• 页码: 78-95
• 关键词: multidefendant settlements; pretrial negotiation; rules; insolvency; divergence; CONTRACTS; liability; monopoly; PRIVATE; joint

摘要

Many settlement contracts in litigation involving multiple plaintiffs (or multiple defendants) include most-favored-nation. (MFN) clauses. If an early settlement includes an MFN and the defendant settles later with another plaintiff for more money, the early settlers receive these terms too. If the defendant knows the aggregate distribution of expected awards but cannot discriminate among the Privately informed plaintiffs, then MFNs avoid costly delay. Plaintiffs with weak cases settle early rather than on the courthouse steps. The effects of MFNs on. the settlement terms, plaintiffs welfare, litigation rates, and the defendant's ex ante incentives are considered and alternative explanations are explored.