We theoretically and experimentally investigate several ways to reduce frivolous litigation. We first compare the relative efficiency, notably in terms of deterrence of frivolous litigation and of settlement likelihood, of two cost allocation rules: the American rule and the English fee-shifting rule. We then investigate whether a mechanism of information disclosure over the identity of frivolous plaintiffs, similar to the so-called “name and shame” device implemented in a few North American States, may help reduce frivolous lawsuits. We first highlight that frivolous suits are more frequent than predicted whatever the rule in force. We also show that the English rule fails, in our experiment, to achieve the predicted effect of preventing frivolous litigation. Finally, we find that the introduction of a name and shame device proves to significantly reduce the likelihood of frivolous suits. Our results are interpreted in the light of the experimental literature on the ultimatum bargaining game.
