The Relationship of Alternative Negligence Rules to Litigation Behavior and Tort Claim Disposition

Abstract

Recently most states have abandoned the traditional tort defense of contributory negligence and substituted a form of comparative negligence. Using an extensive data set of auto accident injury claims, we provide evidence on the relationship between negligence rules and claimants' litigation decisions to retain attorneys, file lawsuits and litigate versus settle out of court. Litigation choices appear to be rational responses to the varying incentives created by alternative tort standards. We find that in contrast to comparative negligence, claims arising under comparative negligence are associated with greater probabilities of attorney involvement, higher average award levels, and longer delays in securing payment. Only 37% of claims involving attorneys in contributory negligence states result in a lawsuit being filed compared to 49% and 47% under the pure and modified forms of comparative negligence, respectively. The study provides the first statistical evidence on the litigation costs of the new forms of comparative negligence.