TILEC seminar on the law and economics of settlements

Over the past decades, legal procedure has progressively lost its previous black-letter law identity and begun to attract the scholarly attention of both lawyers and economists. In particular, settlements have steadily grown into an area of ample interdisciplinary research due to complex questions of judicial economy, litigation costs and incentives for the resolution of conflicts out of the courts. On 11 December 2009, TILEC organised a seminar on this topical issue. In her presentation, Kathryn Spier (Harvard University) discussed so-called high-low agreements, whereby a defendant and a plaintiff agree before going to the court on the lowest and highest amounts of compensation to be paid irrespective of the court decision. Jonathan Masur (University of Chicago) and John Bronsteen (Loyola University of Chicago) approached the matter from a 'hedonic' perspective and discussed the effects of an individual's adaptation to physical damage on her incentives for settlement. The seminar was productive and the presentations raised many questions to be addressed by future research.