The Resolution Process and the Timing of Settlement of Medical Malpractice Claims

Abstract : We draw on uniquely detailed micro-level data from a Belgian professional medical liability insurer to examine how different procedural and legal events that take place during the unfolding of a medical malpractice claim influence the timing of its settlement. Utilizing the competing risks regression framework, we find that settlement hazard is all else equal statistically significantly positively associated with the completion of those procedural and legal events that most effectively reveal factual information about the underlying medical malpractice case. Consistent with theory, settlement hazard is either unassociated or even negatively associated with the completion of other procedural and legal events. Our analysis therefore provides policy insights into which aspects of the resolution process could be emphasized, and which de-emphasized, in order to reduce the often excessive duration of medical malpractice claims and its adverse effects on the healthcare system.

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Whistleblower Protection: Theory and Experimental Evidence

Abstract : Whistleblowing by employees plays a major role in uncovering corporate fraud. Recent laws and global policy recommendations aim at facilitating whistleblower protection to enhance the willingness to report and to increase deterrence. We study these issues in a theory-guided lab experiment. Whistleblower protection indeed leads to more reporting of misbehavior. However, our experimental findings suggest that non-meritorious claims are an issue, as they reduce prosecutors' incentive to investigate, which hampers the intended improvement of deterrence.

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Public Relations Litigation

Abstract : It is no secret that litigation can harm a defendant’s reputation. Less well understood is that plaintiffs—and especially sophisticated business plaintiffs—use litigation to enhance their reputations. This Article examines how and why litigants use courts of law to influence the court of public opinion. In doing so, this Article makes three contributions to the literature. Descriptively, it improves our ability to understand litigants’ incentives. For decades, legal scholars have asked: why do plaintiffs file lawsuits they know they cannot win? This question has divided scholars: Law and economics scholars argue it is because of wealth extraction through settlements, while law and social movements scholars attribute it to social mobilization and heightened public awareness. This Article synthesizes the insight from these academic camps to provide a more complete and nuanced understanding of litigants’ incentives: that is, litigation can serve economic and informational objectives for both private and public gain. Normatively, this Article highlights the importance of an oft-neglected function of adjudication: information transmission. Accounting for litigation’s effects in court of public opinion enables us to better distinguish between socially desirable and undesirable “public relations litigation.” Practically, this insight allows us to design better rules for encouraging the former while discouraging the latter.

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