The main purpose of this paper is to present empirical estimates of a model of the disposition of claims through the courts. A second purpose of the paper is to provide evidence relevant to the policy debate over tort reform. The theoretical model is described in Sec. 2. Section 3 discusses estimation and describes the data. Section 4 reports empirical results, including goodness of fit of the model and parameter estimates. Section 5 provides estimates of the probability of winning at verdict for cases settled out of court. Section 6 analyzes the discrepancy between mean award at verdict and settlement and the extremely skewed distribution of dollar payout. Section 7 discusses the effects of actual and hypothetical tort reforms and simulates their ramifications on the entire disposition process. Section 8 contains concluding remarks.
This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/principles.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.