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more transparent than a conventional confidential products liability

settlement. settlements

On and

the negative side, probably increased

it may have reduced the number of cases

the number of that were tried.

It was also less transparent than conventional public trial.

51

It also allowed Bayer to reduce the total amount paid out to cervistatin claimants as compared with a more conventional mass tort

paradigm. misconduct

If pharmaceutical mass tort litigation and causes inefficiently high level of

overdeters corporate precautions to occur

then mass

this is a positive outcome.

If, on the

torts

underdeter

harmful

activity,

then

other hand, pharmaceutical this reduced payout may

inefficiently reduce future precautionary measures. system probably does both, depending on the specific expected liability for it (Garber, 1993).

Of course the tort product and the

Similarly, the compensatory function of tort law was either well

or ill-served depending on one’s

schedule. Press for a death from

reports suggest rhabdomyolysis.

views as to the adequacy of Bayer’s that Bayer offered approximately $1 m This is a generous settlement compared

to that available to many victims of misfortune.

On the other hand it

is substantially less than the $4-9 and other markets implicitly assign life (Viscusi and Aldy, 2003).

million dollars to the value of

that the US labor a statistical human

Ultimately, it is not possible, on the balance, to conclude that the Bayer settlement strategy either enhanced or reduced public welfare. Like many policy experiments, it is an interesting alternative whose advantages and disadvantages should be understood.

CONCLUSIONS AND POLICY IMPLICATIONS

Confidential settlement agreements are understandably

concealing

important

dangers

from

the

public.

Yet

outright

decried bans on

as

51 ____________ See also Hensler (1998) mass tort settlements).

(discussing depersonalizing aspects of

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