Friday, October 17, 2008
Anderson on Defendant's Incentives for Confidential Mass Tort Settlements
James Anderson of RAND has posted his latest working paper titled "Understanding Mass Tort Defendant Incentives for Confidential Settlements: Lessons from Bayer's Cerivastatin Litigation Strategy." Here's the abstract:
Settlement agreements that require a plaintiff not to disclose or publicize any information about her claim are both common and controversial. Under some conditions, however, a mass tort defendant will rationally choose to discourage such secrecy. A defendant can use publicity to act as a commitment device akin to a most-favored-nation agreement to increase its bargaining power with plaintiffs. The paper uses the real world example of Bayer's cerivastatin litigation as a case study to illustrate this theory in practice and to explore the public policy implications of this finding.