Class Action Lawsuits and Lawyers

2 (November 1998). 16. A 2002 report by the President's Council of Economic Advisors investigated the burden of liability costs on the economy, but it did not provide new information about the incentive effects of tort liability. Rather, the report sketched three alternative scenarios, each of which assumed that certain categories of the direct costs estimated by Tillinghast have no impact on the behavior of potential injurers and are thus "excessive.
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Class Action Lawsuits and Lawyers

Instead of pursuing only a selected subset of the alleged injurers (often just the single party with the deepest pockets) and shifting the costs of dealing with the remaining parties to that selected group, plaintiffs must sue everyone from whom they hope to collect damages. Second, if some of the injurers are bankrupt, defunct, or otherwise unable to pay their share of the damages, several liability leaves plaintiffs partially uncompensated, whereas joint-and-several liability compensates them more fully, to the extent that other, deeper-pocketed injurers can be tapped for their fellow injurers' shares. Offsetting Payments from Collateral Sources Under the law's traditional "collateral-source rule," the fact that an injured plaintiff has received benefits from some independent source--such as an insurance policy--may not be considered in determining whether a defendant should pay damages and, if so, how much. In some cases, the collateral source exercises a lien or right of subrogation and is reimbursed for the overlap between the benefits and the damages.
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