Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/23040 
Year of Publication: 
2003
Series/Report no.: 
CSLE Discussion Paper No. 2003-09
Publisher: 
Universität des Saarlandes, Center for the Study of Law and Economics (CSLE), Saarbrücken
Abstract: 
We present, for the first time, a model of recent institutional developments in litigation funding across several European jurisdictions. Recognizing the financing constraints that British cost rules may impose on litigants, these new contractual arrangements combine contingency fees with third party cover for cost in the event of losing the case: we call these ?Third Party Contingency? (TPC) contracts. Signing a TPC contract can make filing a suit credible and may increase settlement amounts. This does not, however, increase the likelihood of going to trial, since TPC contracts are only of mutual benefit to the plaintiff and the third party when the case settles out of court. We also find that the mere availability of TPCs may generate the above strategic effect.
Subjects: 
Contingent fees
British cost allocation rule
Legal Cost Insurance
strategic moves
JEL: 
C7
K41
G22
Document Type: 
Working Paper

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