On Settling Many Suits

Abstract

A simple model is used to draw the following conclusions: the incentives for the defendant to settle are less in the many plaintiff game than in the single plaintiff game. In other words, there are suits that the defendant would settle against only one plaintiff that he would not settle were he contemplating actions by subsequent plaintiffs. this result clearly has implications for litigation strategy by plaintiffs. For example, class action suits allow the bundling of many suits by individual plalintiffs into one suit brought on behalf of all plaintiffs. The advantages of this and other bundling devices should be examined in light of the effect on defendants' expected return from bringing suit of changing favorably the defendant's incentive to settle.