An economic analysis of the plaintiff's windfall from punitive damage litigation
Article Abstract:
Punitive damages that exceed litigation costs constitute economically inefficient windfalls for plaintiffs. The inefficiencies of such windfalls include inefficient compensation, encouragement of risk-seeking behavior and a poor allocation of legal resources. The amount of punitive damages in excess of litigation costs should go to the state rather than to the plaintiff. A more limited reform would be to change the tax treatment of punitive damages to reduce their inefficiency. Punitive damages should be nondeductible for the defendant and included in the gross income of the plaintiff.
Publication Name: Harvard Law Review
Subject: Law
ISSN: 0017-811X
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
When should courts allow the settlement of duty-of-loyalty derivative suits?
Article Abstract:
The settlement-approval mechanism available for shareholder derivative suits is inadequate to deter collusive settlements, particularly in duty-of-loyalty suits, and should be revised to require settled resignation of all named individual defendants. This change would encourage plaintiffs' attorneys to file fewer frivolous suits, while deterring wrongdoing by imposing penalties that cannot be shifted to defendant-corporations. The Delaware courts' Richards test for approving shareholder suits actually encourages attorneys to file frivolous suits by allowing their fees.
Publication Name: Harvard Law Review
Subject: Law
ISSN: 0017-811X
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Discovery in federal demand-refused derivative litigation
Article Abstract:
A liberal interpretation of Federal Rule of Civil Procedure 23.1 allowing discovery in demand-refused derivative litigation is necessary for adequate determination of the validity of plaintiffs' claims. Efforts to limit demand-refused plaintiffs' right to discovery, such as the Delaware Supreme Court's decision in Levine, should not be imitated by the federal courts. Removal of discovery would rob demand-refused litigation of its deterrent effect and compensatory value.
Publication Name: Harvard Law Review
Subject: Law
ISSN: 0017-811X
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: The winged gudgeon - an early patent controversy. An economic incentives analysis of the jury's role in patent litigation
- Abstracts: Fighting on the job: analysis of recent arbitration decisions. Preparing your client for mediation
- Abstracts: Personal goodwill cuts tax on corporate sale or liquidation. Final regs. clarify rules for reducing bases due to debt discharge
- Abstracts: An overview of ADA and its potential effects on workers' compensation law. Second generation employment discrimination: a structural approach
- Abstracts: Reconceptualizing American legal professionalism: a proposal for deliberative moral community