Understanding Mass Tort Defendant Incentives for Confidential Settlements: Lessons from Bayer's Cerivastatin Litigation Strategy

40 Pages Posted: 15 Oct 2008

Date Written: September 9, 2008

Abstract

Settlement agreements that require a plaintiff not to disclose or publicize any information about her claim are both common and controversial. Under some conditions, however, a mass tort defendant will rationally choose to discourage such secrecy. A defendant can use publicity to act as a commitment device akin to a most-favored-nation agreement to increase its bargaining power with plaintiffs. The paper uses the real world example of Bayer's cerivastatin litigation as a case study to illustrate this theory in practice and to explore the public policy implications of this finding.

Suggested Citation

Anderson, James M., Understanding Mass Tort Defendant Incentives for Confidential Settlements: Lessons from Bayer's Cerivastatin Litigation Strategy (September 9, 2008). RAND Working Paper Series No. WR- 617-ICJ, U. of Pittsburgh Legal Studies Research, Available at SSRN: https://ssrn.com/abstract=1281626 or http://dx.doi.org/10.2139/ssrn.1281626

James M. Anderson (Contact Author)

RAND Corporation ( email )

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