"Third Party Contingency" Contracts in Settlement and Litigation

We present a model of recent institutional developments in litigation funding across several European jurisdictions. They combine contingency fees with third party cover for cost in the event of losing the case: we call these "Third Party Contingency" (TPC) contracts. A TPC contract can ma...

Full description

Saved in:
Bibliographic Details
Published in:Journal of institutional and theoretical economics 2004-12, Vol.160 (4), p.555-575
Main Authors: Kirstein, Roland, Rickman, Neil
Format: Article
Language:English
Subjects:
Contingencies
Contingency fees
Contract negotiations
Contracts
Economic costs
Economic models
Economic theory
Economics
Europe
Fees
Institutionalism
Insurance expenses
Insurance settlements
Litigation
Plaintiffs
Settlements & damages
Studies
Third party
Trials
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We present a model of recent institutional developments in litigation funding across several European jurisdictions. They combine contingency fees with third party cover for cost in the event of losing the case: we call these "Third Party Contingency" (TPC) contracts. A TPC contract can make filing a suit credible and may increase settlement amounts. This does not, however, increase the likelihood of going to trial, since TPC contracts are only of mutual benefit to the plaintiff and the third party when the case settles out of court. We demonstrate that the mere availability of TPCs may generate this strategic effect.
ISSN:0932-4569
1614-0559
DOI:10.1628/0932456042776104