Do fee-shifting rules affect plaintiffs’ win rates? A theoretical and empirical analysis

• Published in: International review of law and economics 2021-03, Vol.65, p.105967, Article 105967
• Main Authors: Doménech-Pascual, Gabriel, Martínez-Matute, Marta, Mora-Sanguinetti, Juan S.
• Format: Article
• Language: English
• Subjects: Administrative courts; Court fees; Fee-shifting rules; Judicial congestion rates; Judicial review; Plaintiff win rates
• ISSN: 0144-8188; 1873-6394
• DOI: 10.1016/j.irle.2020.105967

•We study whether fee-shifting rules can affect plaintiffs’ win rates.•Spain applied the English rule in 2011 in the administrative jurisdiction.•The English rule increased plaintiffs’ win rate while also reducing litigation.•The increase was greater in the less congested jurisdictions. This article studies whether fee-shifting rules can affect plaintiffs’ win rates. Beyond theoretical modeling, this study goes a step further and provides empirical evidence on this issue, thanks to the study of a real change in Spanish legislation. Spain applied the so-called English rule in 2011 in the administrative jurisdiction. This study explores whether plaintiffs were more or less successful when litigating against public administrations since then. After controlling for several other factors, it is shown that the new rule considerably increased plaintiffs’ win rate (while also reducing litigation). The paper also presents a theoretical model explaining that the English rule can increase the prevalence of judgments in favor of plaintiffs through two channels: the selection of cases brought before the courts by interested parties and the level of deference paid by courts to the decisions under review.