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30 such “cheating” and it seems that plaintiffs’ counsel believed Bayer. As chief counsel of Bayer, George Lykos, put it, “no settlement is ever

truly secret.”

31

Pharmaceutical mass tort trial lawyers compare notes

and the legal tools for enforcing a private secrecy agreement are of

only limited efficacy.

Accordingly, Bayer’s claim that it would

not

generally deviate sufficient number

from its schedule of plaintiffs and

was apparently believed their attorneys.

by

a

Comparing Bayer’s Approach to a Most-favored Nation Agreement as a Commitment Strategy

In agreement proof: t defendant period, t with addi entering defendant high pers worthwhil early-set

some ways the Bayer strategy is less flexible than an MFN

. he

As Spier (2003) points out, the early-settling plaintiffs could

MFN is not renegotiation- renegotiate with the

in his

the second period under certain conditions.

In the second

might

be

in

the

defendant’s

interest

if

allows

it

to

settle

tional plaintiffs of a into the MFN agreement

particular type.

Suppose that

with early-settling plaintiffs,

after the

learns of a large number of high-valuation plaintiffs with onal expected values of recovery at trial. It might be e for the defendant to renegotiate with the first group of tling plaintiffs if it would allow settlement with the second

group

of plaintiffs.

offer

the first group

This is true even of plaintiffs the

if it would not be worthwhile to same deal necessary to prevent

trials with the second, high-valuation plaintiffs. MFN strategy can accommodate new information about plaintiffs.

In the

this respect, the distribution of

In contrast, the Bayer approach allows no renegotiation with

early-settling plaintiffs, an

plaintiffs.

The combination of the large number of

announced

schedule,

no

confidentiality

agreement,

and

____________ See Schuck (1995) on importance of maintaining credibility and reputation because many actors are repeat players in litigation. 30

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