Sunday, October 4, 2009
Lemos on Fee Shifting and Litigation Incentives
Margaret H. Lemos of Cardozo School of Law has posted Do Litigation Incentives Work? How Attorneys’ Fee Shifts and Damage Enhancements Affect Litigants and the Law to SSRN.
Abstract:
Congress regularly uses procedural mechanisms like one-way attorneys’
fee shifts and damage enhancements to strengthen private enforcement of
federal law. According to standard economic theory, both devices should
increase the number of suits by private parties seeking to enforce the
substantive terms of the relevant statutes. Commentators have
considered such litigation incentives through the lens of longstanding
debates about the optimal level of enforcement, with many arguing that
fee shifts and enhanced damages are likely to produce too much
litigation-and thus too much deterrence-in certain contexts. Far less
attention has been paid to how litigation incentives actually work. Few
scholars have investigated how existing statutory fee shifts and damage
enhancements have affected the behavior of litigants, and no study to
date has explored how those mechanisms might influence judges and the
law.
This
Article is the first to assess the efficacy of litigation incentives as
part of an enforcement boosting strategy. I argue that one-way
attorneys’ fee shifts and damage enhancements may not, in fact, result
in stronger enforcement. First, the available empirical evidence
suggests that litigation incentives-particularly fee shifts-do not
always work in the sense of generating more litigation. Second, when
litigation incentives do work, they may trigger a judicial backlash
against the very rights that Congress sought to promote. I show that
caseload pressures are likely to make judges-especially those who are
not naturally inclined to favor the claims in question-hostile to any
notable increases in the number of suits filed under a given statute.
In an effort to counteract what they see as excessive litigation,
judges may adopt procedural rules that dampen the effects of fee shifts
and damage enhancements. Most importantly, judges may react to
litigation incentives by narrowly interpreting the substantive
provisions of the relevant statutes.
RJE
http://lawprofessors.typepad.com/civpro/2009/10/lemos-on-fee-shifting-and-litigation-incentives.html