May 20, 2011
Your Next Investment? Jacoby & Meyers
Jacoby & Meyers has filed a lawsuit challenging restrictions on non-lawyer ownership and investment in law firms. A post on the Legal Ethics Forum links to various sources.
This is a very interesting development indeed - and would seem to me to benefit the corporate bar more than plaintiff-side personal injury firms like J&M, or at least as much. (Although looking at the J&M site I learned they are a "full service law firm").
The real action for mass torts is related, but not quite the same: the sale of claims or debt based on claims. See Tony Sebok, The Inauthentic Claim on SSRN. Another interesting article that takes a different approach to the question is Jonathan T. Molot, Litigation Finance: A Market Solution to a Procedural Problem, 99 Geo. L.J. 65-115 (2010). You can access it from his website here.
May 19, 2011
Birnbaum to work as Ground Zero Special Master
The Wall Street Journal reports that the Justice Department plans to appoint Sheila Birnbaum to run the $2.8 billion fund for Ground Zero workers. Here's an excerpt from the story:
The new fund was created late last year to provide compensation and health care for those who became ill after being exposed to the debris of World Trade Center rubble.
Ground Zero workers, as well as nearby residents and office workers who also breathed in the dust of the site, are eligible for compensation if the special master concludes their injuries are the result of such exposure.
. . .
According to people involved in the process, the Obama administration is concerned the fund could be swamped with thousands of applications for compensation from people who were many blocks away and now claim they have suffered after having watching the planes strike the buildings.
"The real challenge here is going to be figuring out what is and isn't compensable,'' said lawyer Noah Kushlefsky, who represents Ground Zero workers. "This fund is going to be harder than the last one, because the last one largely focused on the people who had died.''
Justice Department lawyers have already begun working out those rules, but they won't be finalized until the summer. In October, the government plans to start accepting claims for compensation.
May 16, 2011
What is the purpose of trials?
A paper that promises to be very interesting was posted on the NBER site recently. Its called "Does Accuracy Improve the Information Value of Trials" by Anup Malani & Scott A. Baker. Here is the abstract:
We develop a model where products liability trials provide information to consumers who are not parties to the litigation. Consumers use this information to take precautions against dangerous products. A critical assumption is that consumers cannot differentiate between firms that have never been sued and firms that have been sued but settled out of court. In this framework, we show that perfectly accurate courts do not maximize information to consumers and thus welfare, contrary to Kaplow and Shavell (1994). More accurate courts provide more information only if producers go to trial. Greater accuracy, however, encourages producers of dangerous products to settle and hide their type. When courts are perfectly accurate, all low quality producers settle. And given the lack of any information from trials about bad types, consumers (rationally) fail to take precautions. If consumer precautions are relatively more efficient than producer precautions, our conclusion stands even when firms can invest in improving the safety of their products.