Changes In Fee-Shifting Rules and Likelihood of Trial Sample Clauses

Changes In Fee-Shifting Rules and Likelihood of Trial. As we have seen in Proposition 4, for given raw parameters Ωˆ, a change in the fee-shifting rule Φ determines a change in the likelihood of legal disputes. Essentially any change in Φ that decreases the plaintiff’s Court costs increases the likelihood of legal disputes — both those that are settled before trial (outcome S) and those that are tried in Court (outcome C). On the other hand, as we have noted before, a change in the fee-shifting rule leaves cT = cPT + cDT = cˆPT + cˆTD unchanged, and hence does not affect (8). The latter observation suggests that there should be a sense in which fee-shifting is irrel- evant in determining whether a given law suit will be settled out of Court or in fact litigated in Court. This is in fact true in our set up, provided we are careful enough in making the claim precise and taking into account that we are making it for a given law suit. In other words, we need to filter out of the irrelevance claim the effect that a change in fee-shifting rule may have in the Plaintiff’s decision to file a suit or not. Fist we will make the claim precise, and then we will discuss the intuition behind it. Suppose we have a given “case” Ωˆ and consider a change in the fee-shifting rule from, say, Φj to Φjj. Let’s call the resulting parameters after fee-shifting is taken into account Ωj = Φj(Ωˆ) and Ωjj = Φjj(Ωˆ). Xxxxxxx also that we know that the change from Φj to Φjj has no effect on whether P decides to file a suit against D. In particular suppose that we know that P will file a law suit against P both under parameters Ωj and Ωjj.32 Then, since the switch from Ωj to Ωjj leaves (8) unaffected, it must be that either the suit is settled out of Court or it is tried in Court with both parameters Ωj and Ωjj. Collecting our analysis so far, we state the following without further proof.
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