Financially-constrained lawyers: An economic theory of legal disputes

• 成果类型: Article
• 署名作者: Landeo, Claudia M.; Nikitin, Maxim
• 署名单位: University of Alberta; HSE University (National Research University Higher School of Economics)
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2018.03.002
• 发表日期: 2018
• 页码: 625-647
• 关键词: Civil litigation; Access to justice; social welfare; Financially-constrained lawyers; asymmetric information; perfect Bayesian equilibrium; deterrence; lawsuits; settlement; LITIGATION; Third-party lawyer lending industry; Third-party litigation funding

摘要

Financial constraints reduce the lawyer's ability to file lawsuits and bring cases to trial. As a result, access to justice for victims, pretrial bargaining, and potential injurers' precaution might be affected. We study civil litigation using a model that allows for asymmetric information, financially-constrained lawyers, third-party lawyer lending, and a continuum of plaintiffs types. We contribute to the economic analysis of law by generalizing seminal models of litigation (Bebchuk, 1984, 1988; Katz, 1990), offering the first formal definition of access to justice, and presenting comprehensive social welfare analysis of relevant public policy. We provide complete equilibrium characterization and identify necessary conditions for the existence of the mixed- and pure-strategy PBE. Access to justice is denied to some victims under the mixed-strategy equilibrium. We then study the social welfare effects of policies aimed at relaxing lawyers' financial constraints, and identify a necessary and sufficient condition for a welfare-enhancing effect. (C) 2018 Elsevier Inc. All rights reserved.