The Litigious Plaintiff Hypothesis: Case Selection and Resolution
Theodore Eisenberg, Henry S. Farber
A central feature of the litigation process that affects case outcomes is the selection of cases for litigation. In this study, we present a theoretical framework for understanding the operation of this suit selection process and its relationship to the underlying distribution of potential claims and claimants. We implement the model empirically by assuming that individuals vary more in their litigiousness (inverse costs of litigation) than do corporations. This assumption, coupled with the case selection process we present, yields clear predictions on trial rates as a function of whether the plaintiff and defendant were individuals or corporations. The model also yields a prediction on the plaintiff's win rate in lawsuits as a function of the plaintiff's identity. Our empirical analysis, using data on over 200,000 federal civil litigations, yields results that are generally consistent with the theory. Lawsuits where the plaintiff is an individual are found to have higher trial rates and lower plaintiff win rates.
Published: RAND Journal of Economics, 1997, Vol. 28 (Spec): S92-S112.
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