Litigation with Legal Aid versus Litigation with Contingent/Conditional Fees

In the last few years, legal aid has been much debated, especially in the European Union. Our aim is to determine in a tort litigation model the impact of legal aid upon plaintiffs’ decision whether to sue, plaintiffs’ level of expenses at trial and the level of deterrence of potential injurers. We study the two most common types of legal aid: fixed and proportional. Whatever the system, we show that increasing legal aid induces more cases filed and more deterrence (fewer accidents). Then we compare these incentives with those given by the contingent/conditional fees systems. We show that the incentives to bring suit are higher in the contingent/conditional fees systems, but incentives to take care are higher with legal aid since legal expenses from the plaintiff are higher.