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confidential settlements may threaten the private character of tort

litigation and may decrease settlements.

52

Are there means to reduce

confidential settlements voluntarily?

This chapter addresses that

question by examining the incentives order to understand why confidential adopted in a particular litigation.

faced by mass tort defendants in settlements might or might not be In particular, I examine the non-

confidential settlements that ended most in order to understand these incentives.

of

the

cerivastatin

litigation

Somewhat surprisingly, I found that mass tort defendants can

actually benefit from eschewing confidentiality agreements under

conditions.

attorneys

can

Promoting limited transparency

allow

the

defendant

to

commit

among plaintiffs and itself to offering a

certain their limited

array of take-it-or-leave it offers to plaintiffs.

This analysis

informally

extends

the

settlement

literature

and

provides

a

real-world

example of how communications among plaintiffs can further the

defendant’s commitment strategy. inconclusive: total compensation

Net public welfare effects are to claimants was almost certainly

less

than it would have been had Bayer sought confidential settlements the process was also somewhat more transparent to plaintiffs and increased horizontal equity.

but

If policymakers decide that this model of limited private-sector

transparency implications

should be encouraged, there are two important that emerge from the cerivastatin experience.

policy First,

publicizing dangers reduces the incentives for defendants confidentiality agreements as a condition for settlement. problems with rhabdomyolysis and cerivastatin were highly

to demand Since the publicized,

there

was

little

temptation

for

Bayer

to

attempt

to

reduce

liability

exposure by insisting on confidentiality agreements.

In the

cerivastatin

case,

the

publicity

resulted

from

regulatory

inquiry

and

the

subsequent

withdrawal

of

cerivastatin.

Regulatory

inquiry

and

the

____________ See Helland and Lee (infra)at 1. 52

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