We analyze the design of legal principles and procedures for court decision-making in civil litigation. The objective is the provision of appropriate incentives for potential tort-feasors to exert care, when evidence about care is imperfect and may be distorted by the parties. Efficiency is...

In the article, we discuss the phenomenon of third-party financing of lawsuits, which has been subject to intense debate from a legal as well as from an economic point of view. Drawing on the examples of Germany, Australia, and the United States, we show in Part I that different legal systems...