Lessons from America
- New Horizons in Law and Economics series
Edited by Jürgen G. Backhaus, Alberto Cassone and Giovanni B. Ramello
Chapter 1: The Law and Economics of Class Action Litigation: Setting the Research Agenda
JOBNAME: Ramello PAGE: 3 SESS: 2 OUTPUT: Tue Feb 28 11:47:52 2012 1. The law and economics of class action litigation: setting the research agenda Jürgen G. Backhaus, Alberto Cassone and Giovanni B. Ramello1 1. MAKING SENSE OF AGGREGATE LITIGATION In 1961 an inﬂuential contribution by Guido Calabresi, ‘Some Thoughts on Risk Distribution and the Law of Tort’, challenged the then-prevailing assumption that spreading losses was more efﬁcient than concentrating them just because ‘the real burden of a loss is smaller the more people share it’ (p. 517). Just a few years later another seminal work, The Logic of Collective Action by Mancur Olson (1965), provided evidence that the uncoordinated action of individuals can sometime be less efﬁcient than coordinated action. Olson’s contribution then became a prominent explanation of the formation of groups and, as a by-product, of the emergence of speciﬁc institutions whose purpose it is to make that coordination possible. The two researches were not related; yet, it is here argued, they provided two pillars for explaining the emergence of aggregate litigation and class 1 The research contained in this volume has been favoured by the brainstorming occurred at the conference ‘Introducing Class Action in Europe: A Comparative Law and Economics’ held in Alessandria in January 2007, organized by two of us with the help of two other colleagues. The insights provided by this venue has proven to be crucial for gathering the list of book contributors and identifying the topics...
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