Settlement Range and Cost Allocation Rules: A Comment on Avery Katz's <italic>Measuring the Demand for Litigation: Is the English Rule Really Cheaper?</italic>

Abstract

The paper by Avery Katz has considerable ambitions: not only does it seek to treat the spending decisions in legal actions as variable, but it also seeks to make some plausible empirical estimates of the implications of a shift in the rule used to allocate costs as between the parties to an action. The main object of this comment is to explore three quite closely related arguments that the paper prompts. The first concerns a gap in the integration of the analysis of the various stages in the litigation process, the second concerns the appropriate objective function for policy, and the third concerns some observations about institutional adjuncts to the cost indemnity rules used in England.