who rejected the schedule, Bayer announced While Bayer did not actively publicize the
that they would settlements, it
the U.S., part of the appeal of this every claimant would know that he or other claimants.
strategy was its transparency: she was being treated the same
The cerivastatin litigation provides an instructive example
real-world litigation voluntarily adopted a
context in which non-confidential
a private-sector defendant
the incentives that led Bayer to pursue this strategy? what conditions will lead a defendant to eschew secret
More generally, settlements?
In order to answer these questions, I interviewed defense and
plaintiff’s and medical
in the litigation and structured interviews
reviewed the economic helped explain both
the current prevalence of confidential settlement agreements
motivation behind the theoretic models from
cerivastatin the economic
strategy. The on settlements
and the game explain
incentives that lead to this result.
The story that emerges is somewhat unexpected.
wisdom is that confidential settlement agreements aid defendants. Confidentiality minimizes bad publicity for the corporate defendant
which is minimize
important to the defendant both for its own sake and to
aided Bayer in reducing its overall costs.
permitted Bayer plaintiffs than
to credibly adopt a tougher bargaining would have been possible had it sought
strategy with confidential
settlements. to plaintiffs
It allowed Bayer which allowed it
commit to keep more
a take-it-or-leave it of the surplus in the