POLS 121 Chapter Notes - Chapter NA: Adversarial System, Tort Reform, Market Capitalization
24 Nov 2020
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It does not result from the way the legal system handles routine disputes but it derives from the more special areas of law (1) two examples are securities class actions and asbestos. Accurate quantitative measures suggest that litigation in the us does not differ substantially from litigation elsewhere, but aggregation over a myriad categories can easily hide outliers. In several discrete areas, american courts function in a manner that can only be described as disastrous. A single victim among a business"s aggregate injuries would be unable to threaten credibly and would recover nothing out of court. As a result, suboptimal precautions would ensue on the business"s side to prevent damages to individual consumers. In this way, the business could escape liability for its negligence and neglect precautions. The class action suit eliminates the disincentive by imposing the same incentives the firm would face if it"s aggregate damages were imposed entirely on one person: there is a hitch however.
