Legal Cost Insurance as a Strategic Device in Settlement Negotiations

Arbeitspapier

The papers show that Legal Cost Insurance (LCI) is a device to enhance potential litigants' bargaining position rather than to re-allocate risk. Being insured decreases the cost an insured party has to bear if settlement negotiations fail and the case goes to trial. This shifts the threat points, which has an impact on the bargaining result. In negative expected value suits, LCI can make the threat to sue credible and motivate potential defendants to make positive settlement offers. Hence, even risk-neutral agents may find it beneficial to insure.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CSLE Discussion Paper ; No. 99-01

Classification and Topics

• Classification: Wirtschaft ; Litigation Process ; Insurance; Insurance Companies; Actuarial Studies
• Subject: Civil Procedure ; Bargaining ; Settlement ; Negative Expected Value Suits

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kirstein, Roland
• Event: Veröffentlichung
• (who): Universität des Saarlandes, Center for the Study of Law and Economics (CSLE)
• (where): Saarbrücken
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/23056
• Last update: 10.03.2025, 11:45 AM CET