Why Plaintiffs' Attorneys Use Contingent and Defense Attorneys Fixed Fee Contracts

Emons, Winand; Fluet, Claude (2016). Why Plaintiffs' Attorneys Use Contingent and Defense Attorneys Fixed Fee Contracts. International review of law and economics, 47, pp. 16-23. Elsevier 10.1016/j.irle.2016.03.004

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Victims want to collect damages from injurers. Cases differ with respect to the judgment. Attorneysobserve the expected judgment, clients do not. Victims need an attorney to sue; defense attorneys reducethe probability that the plaintiff prevails. Plaintiffs’ attorneys offer contingent fees providing incentivesto proceed with strong and drop weak cases. By contrast, defense attorneys work for fixed fees underwhich they accept all cases. Since the defense commits to fight all cases, few victims sue in the first place.We thus provide an explanation for the fact that in the US virtually all plaintiffs use contingency whiledefendants tend to rely exclusively on fixed fees.

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