Table of Contents

Research Handbook on the Economics of Torts

Research Handbook on the Economics of Torts

Research Handbooks in Law and Economics series

Edited by Jennifer H. Arlen

This pioneering Handbook contains specially-commissioned chapters on tort law from leading experts in the field. This volume evaluates issues of vital importance to those seeking to understand and reform the tort law and the litigation process, taking a multi-disciplinary approach, including theoretical economic analysis, empirical analysis, socio-economic analysis, and behavioral analysis. Topics discussed include products liability, medical malpractice, causation, proximate cause, joint and several liability, class actions, mass torts, vicarious liability, settlement, damage rules, juries, tort reform, and potential alternatives to the tort system. Scholars, students, legal practitioners, regulators, and judges with an interest in tort law, litigation, damages, and reform will find this seminal Handbook an invaluable addition to their libraries.

Chapter 15: Contingent-fee contracts in litigation: A survey and assessment

Eric Helland and Seth A. Seabury

Subjects: economics and finance, law and economics, law - academic, law and economics, law of obligations


One of the core features of the U.S. civil justice system is that plaintiffs in tort, and a variety of other suits, pay their attorneys using a contingent fee in which the attorney is paid a fraction of recovery in the event the plaintiff is successful in his or her claim. By contrast, lawyers providing other legal services are paid using a variety of arrangements ranging from an hourly fee to a flat fee for a specific legal service. In light of tort plaintiffs’ nearly exclusive use of contingent-fee contracts, most scholarship has focused on understanding why these fees are used primarily by plaintiffs in personal injury and other tort cases, what the implications of their use are for the level of litigiousness and deterrence, and the potential impact on case outcomes. This uniformity of interest has not led to a consensus of opinion, however. In perhaps no other area of law do the theories of economists diverge more radically from the explanations of other legal theorists. Economists and legal theorists agree on the point that clients should not (or could not) pay their lawyers with an hourly rate or flat fee but disagree on why.

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