Agency problem: Difference between revisions

Agency problem (view source)

Revision as of 22:02, 15 February 2023

16 bytes removed , 15 February 2023

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

82,891

edits

@@ Line 55: / Line 55: @@
 The sorts of litigation banks get into tend to involve claims of art least hundreds of millions of pounds, and typically banks are on the wrong end of them — it is an unusual investment bank that makes a habit of suing its own, solvent clients — meaning that, unless it is prepared to just admit everything and pay up— this happens a lot more than you would think, thanks to an inverted instance of the agency problem — the bank has little control of the process. Unlike a commercial transaction, there is no critical path, since you don't know how the other side will play, so it is hard to fix or even estimate fees, so “[[time and attendance]]” tend to be the order of the day.
-Anyone who has contemplated litigation — that is, most people who have had a loft conversion — will know how dismal the experience of seeking summary judgment for a straightforward and relatively small claim can be. There are no end of artefacts of civil procedure — pleadings, discovery, interlocutories, counterclaims, requests for further and better particulars, witness statements — that exist only for lawyers to spin each others’ wheels, and render litigation utterly futile. There is an absolute floor — we put it at about 10,000,000 — below which it absolutely makes no sense to pursue, or defend, a litigation claim, as the cost of doing so will outstrip the possible dividend of success. Beyond that threshold this is no longer true, and there is a hazy interregnum where lawyers know that can be paid handsomely, indefinitely, for carrying on an argument that most likely will never get to court.
+Anyone who has contemplated litigation — if you’ve ever done a loft conversion, that probably includes you  — will know how dismal the experience of seeking  legal redress through civil procedure can be. Many phases of civil litigation — pleadings, discovery, interlocutories, counterclaims, requests for further and better particulars, witness statements — are time-sinks that exist only for lawyers to spin each others’ wheels, at their respective clients’ expense — and the result is to render litigation utterly futile for a claim below about £10,000,000 — since the cost of pursuing or defending the claim will outstrip any conceivable dividend of success.
-So unique
+Above that threshold, this no longer holds: there is a hazy interregnum where lawyers know they can be paid handsomely, indefinitely, for carrying on an argument that most likely will never get to court, let alone final adjudication.
 {{Sa}}