Playing It Safe with Low Conditional Fees versus Being Insured by High Contingent Fees

Under contingent fees the attorney gets a share of the judgment;under conditional fees he gets an upscale premium if the caseis won, a premium unrelated, however, to the adjudicated amount.This article compares conditional and contingent fees in a frameworkwhere lawyers choose between a safe and a risky litigation strategy.Under conditional fees lawyers prefer the safe strategy; undercontingent fess, the risky one. Risk-averse plaintiffs preferconditional fees over contingent fees when lawyering costs arelow and vice-versa for high lawyering costs.     

Truth-Bonding and Other Truth-Revealing Mechanisms for Courts

In trials witnesses often gain by slanting their testimony. The law tries to elicit the truth from witnesses by cross-examination under threat of criminal prosecution for perjury. As a truth-revealing mechanism, perjury law is crude and ineffective. We develop a perfect truth-revealing mechanism, which exactly offsets the gain from slanted testimony by the risk of a possible sanction. Witnesses testify voluntarily under the mechanism. Implementing an effective truth-revealing mechanism requires a witness to certify accuracy by posting bond. If events subsequently prove that the testimony was inaccurate, the witness forfeits the bond. By providing superior incentives for telling the truth, truth-bonding could combat some distortions by factual witnesses and interested experts, including junk science.