Contribution And Claim Reduction In Antitrust Litigation

This paperback work discusses the major arguments for and against contribution and claim reduction legislation.

Three elements of the antitrust remedial scheme - joint and several liability, the absence of a right to contribution, and the offsetting of settlements against pre-trebled damages - combine to create several unfair results. Similarly situated defendants can be forced to bear very different shares of a damage award at a plaintiff's whim, and defendants collectively face incentives to settle for more than the sum of their expected liabilities at trial. The elimination of joint and several liability would solve these fairness problems, but it would create another one in that the plaintiff, rather than other conspirators, would be forced to bear the risk of a defendant's being unable to pay a judgment. Creating a right of contribution among coconspirators and reducing pre-trebled damages by the share attributable to a settling defendant is a preferable solution. It would redress the fairness problems without impairing a plaintiff's right to full compensation. Such contribution and claim reduction, moreover, would not undermine deterrence, discourage fair settlement, or create severe problems of administrability.

To date the experience of the incidence of private actions for damages in antitrust cases has differed markedly across jurisdictions. The procedural rules surrounding private litigation may account for some of these differences. This paper explores the effect of rules concerning contribution among multiple defendants who are joint and severally liable for a cartel infringement. The no-contribution rule is shown to lead to higher levels of aggregate damages and more information revelation to the private plaintiff. However, the no-contribution rule also has the potential to neuter any public leniency programme, thereby possibly reducing the number of cartels detected.

Is private antitrust litigation out of control, encouraging frivolous suits and deterring companies from pursuing innovative manufacturing, organization, and distributional techniques? Or is it a fair and useful system, particularly during periods when government antitrust enforcement is lax and pro-business? The contributions in this book shed new light on the current debate over treble damage reform.Using a unique collection of data on more than 2,350 antitrust cases filed in five districts between 1973 and 1983 - a research effort instigated by the Georgetown private treble damage project - prominent scholars analyze the key issues involved in reform proposals. " Steven Salop and Lawrence White present an analytic framework for studying private antitrust litigation, setting out the policy issues and providing an overview of the data collected by the project. Paul Teplitz discusses the nature of the data and their collection in greater detail.Kenneth Elzinga and William Wood compare the cost of litigation to the size of settlements and awards in an attempt to gauge the degree to which the system compensates victims of antitrust violations as opposed to the system's effectiveness as a deterrent. Jeffrey Perloff and Daniel Rubinfeld focus on the incentives for litigants to settle, and Stephen Calkins notes the reaction of the legal system to treble damages in the light of motions to dismiss and motions for summary judgment. Thomas Kauper and Edward Snyder look at those cases that followed on government cases (primarily price fixing), and George Benston takes up multi-party cases, considering the effects of class actions, joint and several liability, and various claim reduction reform proposals on deterrence and the incentives to settle.The book's final section presents three interesting and diverse policy commentaries by George Garvey, Ira Millstein, and Donald Turner.Lawrence J. White is Professor of Economics at the Graduate School of Business Administration at New York University. He has recently been appointed a Board Member of the Federal Home Loan Bank Board. Private Antitrust Litigation is sixteenth in the series Regulation of Economic Activity, edited by Richard Schmalensee.

The most important book on antitrust ever written. It shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses.