Lawyers as lawmakers, privilege, and agency

• Published in: International review of law and economics Vol. 38; pp. 144 - 149
• Main Author: Adler, Barry E.
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01.06.2014; Elsevier Science Ltd
• Subjects: Agency; Attorneys; Class action; Class action lawsuits; Client relationships; Lawyers; Legal fees; Legislative process; Litigation; Public good; State court decisions; Studies; Agency; Class action
• ISSN: 0144-8188; 1873-6394
• DOI: 10.1016/j.irle.2013.11.002

•Competition may counter freeriding for investment in class action pleadings.•Copying will not necessarily induce underinvestment in class action pleadings.•Divided award may be the most important cause of underinvestment in class action pleadings. Class action lawyers do not merely represent clients, they also make law, an observation explored by Kobayashi and Ribstein in “Class Action Lawyers as Lawmakers.” Kobayashi and Ribstein observe that a class action lawyer's inability to internalize all the benefits of her innovation may lead to underinvestment in lawmaking, which they describe as a public good. But privileged groups may produce public goods, and where production of the good also enhances the probability that a supplier of the good will be compensated for her production, as may be the case in the selection of counsel in class action suits, there can even be overproduction. Under some circumstances, such overproduction is possible even where production is facilitated by freeriding. Moreover, if there is underinvestment in class action lawmaking, a more general, and potentially greater, cause is inherent in the lawyer–client relationship, namely that the lawyer bears the full cost of litigation but must share the benefits, if any, with the client.