Cost-of-Defence Settlement
Settlement priced by the cost of resisting rather than the merits of the claim.
Where administrative fees alone exceed any plausible aggregate liability, a rational respondent settles regardless of merit. Critics of mass arbitration identify this as its central pathology; defenders note that the same dynamic ran in the opposite direction for two decades, when claims went unheard because individual arbitration made them uneconomic to bring.
See also
- Aggregate Settlement (Mass Arbitration)Global resolution of a mass filing inventory, typically at a fraction of the administrative fee exposure.
- Claim ValueThe expected recovery on an individual claim, discounted for risk and cost.
- Negative-Value ClaimA claim worth less than the cost of pursuing it individually.
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