Skip Navigation

This Article
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (7)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Helland, E.
Right arrow Articles by Tabarrok, A.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

The Journal of Law, Economics, and Organization V19 I2
© 2003 Oxford University Press

Contingency Fees, Settlement Delay, and Low-Quality Litigation: Empirical Evidence from Two Datasets

Eric Helland

Claremont McKenna College

Alexander Tabarrok

George Mason University

Abstract

Although flat fees are common for divorces, wills and trusts, and probate, lawyers in personal injury cases generally are paid by contingency fee or at an hourly rate. Arguments have been made that contingency fees increase low-quality, "frivolous" litigation but counterarguments suggest that contingency fees actually limit such litigation and instead it is hourly fees that increase low-quality litigation. Using a difference in differences test and data on a cross section of states in 1992, we test whether legal quality is lower under contingency or hourly fees. We also examine medical malpractice claims in Florida using a time series centered around a law change that limited contingency fees. We also examine the impact of fee arrangements on the expected time to settlement. We find that hourly fees encourage the filing of low-quality suits and increase the time to settlement (i.e., contingency fees increase legal quality and decrease the time to settlement).


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.