TY  - JOUR
AU  - Chang,Howard F.
AU  - Sigman,Hilary
TI  - Incentives to Settle Under Joint and Several Liability
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7096
PY  - 1999
Y2  - April 1999
UR  - http://www.nber.org/papers/w7096
L1  - http://www.nber.org/papers/w7096.pdf
N1  - Author contact info:
Howard F. Chang
University of Pennsylvania Law School
3400 Chestnut Street
Philadelphia, PA 19104-6204
Tel: 609-688-0245
Fax: 609-688-8602
E-Mail: hchang@law.upenn.edu

Hilary Sigman
Department of Economics
Rutgers University
75 Hamilton Street
New Brunswick, NJ  08901-1248
Fax: 732/932-7416
E-Mail: sigman@econ.rutgers.edu
AB  - Congress may soon restrict joint and several liability for cleanup of contaminated sites under Superfund. We explore whether this change would discourage settlements and is therefore likely to increase the program's already high litigation costs. Recent theoretical research by Kornhauser and Revesz finds that joint and several liability may either encourage or discourage settlement, depending upon the correlation of outcomes at trial across defendants. We extend their two-defendant model to a richer framework with N defendants. This extension allows us to test the theoretical model empirically using data on Superfund litigation. We find that joint and several liability does not discourage settlements and may even encourage them. Our results support the model's predictions about the effects of several variables, such as the degree of correlation in trial outcomes.
ER  -