Optimality of Attorney’s Fee-Shifting Rules: An Empirical Investigation

다국어 초록 (Multilingual Abstract)

Shifting rules of attorney’s fees directly affect the essential aspects of litigation such as incentives to file different lawsuits. We estimate the actual and optimal shifting-ratios of attorney’s fees by utilizing a very unique court dataset from South Korea. First, we found that the actual value of the shifting-ratio is some distance from either 0 (i.e., the American Rule) or 1 (i.e., the British Rule). We observe that this would hold for most countries including even the U.S. and the U.K. worldwide. The optimality is then derived through modeling a tradeoff of deterring the ‘frivolous suit’vs. encouraging the ‘meritorious suit’with the shifting ratios. We reach important conclusions, for example, that the optimal ratio should be lowered in countries with a stronger constitutional belief in the trial right, while it should be raised as the legal services market becomes more competitive.

참고문헌 (Reference)

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