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In September 2007, the 'Moonlight Fire' ripped through 67,000 acres of northern California, forcing the evacuation of 100 homes and the exertion of thousands of firefighters over 16 days. More [...]

The 'fair game' analysis method for resolving legal disputes without expending unnecessary resources is presented. It is always in the client's best interest to explore a settlement before a full-blown lawsuit that may entail a huge cost.

To settle or not to settle, that is the question. When employees threaten to or actually do file employment-based lawsuits, how should employers respond? HR professionals frequently face this question [...]

I. Introduction In this article, we apply standard economic tools to analyze some of the central issues involved in formulating antitrust enforcement policy toward agreements that settle patent litigation. These [...]

The Fahey rule for the tax treatment of income from settlements treats all such income as ordinary, rather than capital gains. This creates several problems and discourages settlement of legal claims. The Fahey standard should be replaced by a standard which considers the origin of the claim.

Many recent class-action antitrust lawsuits have been settled with discount contracts in which the defendants agree to sell to the plaintiffs in the future at a discount off of the retail price charged to other buyers. The sellers can offset such discounts, however, by increasing the retail price. I show that these settlements have very small effects on the average price paid by all consumers; the harm to nondiscount consumers is about equal to the benefits to discount consumers. Since nondiscount buyers are not parties to these cases, however, the courts usually ignore the effect on them. Furthermore, the punishment imposed on sellers is much smaller than the cost to nondiscount buyers. I then examine an alternative form of "coupon settlements" that need not give sellers an incentive to raise price. The analysis is applied to recent settlements in the airline, auto, photocopying, and electronic game industries.

A law and economics approach demonstrates the effect of poverty on legal decision-making. For example, the poor have incentives to accept lower settlements than wealthier people would accept. Those incentives include judgment risk aversion, fee risk aversion, constraints on liquidity and agency costs related to contingent fee arrangements. Variations in settlements due to relative wealth conflict with the goals of deterring tortfeasors and adequately compensating victims. Possible reforms include allowing the Legal Services Corp to represent tort plaintiffs, prohibiting or capping contingent fees, or spreading risk through first-party insurance.