Environmental Law | Law | Law and Economics | Torts
Center for Law and Economic Studies
Center for Contract and Economic Organization
Probably to a unique degree, American law relies upon private litigants to enforce substantive provisions of law that in other legal systems are left largely to the discretion of public enforcement agencies. This system of enforcement through "private attorneys general" is most closely associated with the federal antitrust and securities laws and the common law's derivative action, but similar institutional arrangements have developed recently in the environmental, "mass tort," and employment discrimination fields. The key legal rules that make the private attorney general a reality in American law today, however, are not substantive but procedural – namely, those rules that establish the fee arrangements under which these plaintiff's attorneys are compensated. Inevitably, these rules create an incentive structure that either encourages or chills private enforcement of law.
Over the last decade, as criticism of private enforcement has mounted and the caseload pressure on the federal judiciary has intensified, there has been a growing trend to reexamine and tighten these rules. This Article will argue, first, that this movement to limit private enforcement has proceeded to a considerable extent upon false premises and, second, that many of the deficiencies in the private attorney general's performance that have been noted by courts are the judically self-inflicted consequence of legal rules that establish serious misincentives. More generally, this Article will attempt to explain the behavior of professional plaintiff's attorneys who specialize in class and derivative litigation in terms of the incentives and organizational problems that they currently face.
John C. Coffee Jr.,
Understanding the Plaintiff's Attorney: The Implications of Economic Theory for Private Enforcement of Law Through Class and Derivative Actions,
Colum. L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/26