Bargaining in the Shadow of the Website

Disclosure's Impact on Litigation Behavior

by Eric Helland, Gia Lee

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This paper investigates the significance of secrecy and disclosure for medical malpractice litigation. Starting in the mid-1990s, seventeen states began posting information on a doctor's specific history of medical malpractice claims on state-run websites. The laws creating these sites altered the level of secrecy that would accompany litigation and settlement. Taking into account the varying disclosure requirements across the states, the authors estimate the impact of the altered levels of secrecy on litigant behavior. They find that website disclosure reduces settlement amounts for doctors with multiple payments. They also find evidence supporting two, non-exclusive explanations for the decline. The first is that defendants value secrecy and are no longer willing to pay a secrecy premium after website disclosure. The second is that website disclosure changes the composition of cases, skewing it toward more low-quality claims.

The research in this report was conducted by the RAND Institute for Civil Justice.

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