Secret Settlements in Mass Tort Cases

James M. Anderson (RAND) has posted an article entitled “UnderstandingMass Tort Defendant Incentives for Confidential Settlements: Lessonsfrom Bayer’s Cerivastatin Litigation Strategy” on SSRN.  The abstract is below.

Settlementagreements that require a plaintiff not to disclose or publicize anyinformation about her claim are both common and controversial. Undersome conditions, however, a mass tort defendant will rationally chooseto discourage such secrecy. A defendant can use publicity to act as acommitment device akin to a most-favored-nation agreement to increaseits bargaining power with plaintiffs. The paper uses the real worldexample of Bayer’s cerivastatin litigation as a case study toillustrate this theory in practice and to explore the public policyimplications of this finding.

ADL