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Advocatus, et non latro?: testing the excess of litigation in the Italian courts of justice

Buonanno, Paolo and Galizzi, Matteo M. (2014) Advocatus, et non latro?: testing the excess of litigation in the Italian courts of justice. Review of Law and Economics, 10 (3). pp. 285-322. ISSN 1555-5879

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Identification Number: 10.1515/rle-2014-0022

Abstract

We explore the causality relationship between litigation rates and the number of lawyers, drawing on an original panel dataset for the 169 Italian first-instance courts of justice between 2000 and 2007. In this time period, both the number of lawyers and the civil litigation rate sharply increased, and a mandatory minimum fee was in place for lawyers’ services. We first document that the number of lawyers is positively correlated with different measures of the litigation rate. Then, using an instrumental variables strategy, we find that a 10% increase in lawyers over population is associated with an increase between 1.6 and 6% in civil litigation rates. Our empirical analysis supports the supplier-induced demand (SID) hypothesis for Italian lawyers: following a sharp increase in the number of lawyers, and in the impossibility of competing on price because of the minimum fee regulation, some lawyers may have opportunistically used their informational advantage to induce their clients to bring lawsuits into court more often than would have been optimal if they were acting in the exclusive interest of their clients.

Item Type: Article
Official URL: http://www.degruyter.com/view/j/rle
Additional Information: © 2014 Walter de Gruyter GmbH
Divisions: Social Policy
Subjects: H Social Sciences > H Social Sciences (General)
K Law > K Law (General)
JEL classification: H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
J - Labor and Demographic Economics > J4 - Particular Labor Markets > J44 - Professional Labor Markets and Occupations
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K41 - Litigation Process
Sets: Departments > Social Policy
Research centres and groups > LSE Health and Social Care
Date Deposited: 28 Jan 2015 14:13
Last Modified: 20 Mar 2019 02:31
Projects: CPDA071899
Funders: University of Padua
URI: http://eprints.lse.ac.uk/id/eprint/60800

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