In this paper we consider the role of lawmakers as norm entrepreneurs. Drawing from expressive law theories and social response theories, we shed light on the role of law in shaping social values and norms, and on the ability of the law to produce social norms where they did not exist before. Furthermore, we unveil a possible undesirable effect of legal intervention, where a legal innovation can cause social divide and possible conflicts.

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In the past couple of decades, scholars have predominantly employed rent-seeking models to analyze litigation problems. In this paper, we build on the existing literature to show how alternative fee-shifting arrangements (e.g., the American rule and English rule with limited fee-shifting) affect parties’ litigation expenditures and their decisions to litigate. Contrary to the prevailing wisdom, we discover that, when fee shifting is limited, the English rule presents some interrelated advantages over the American rule, including the reduction of litigation rates and the possible reduction of expected litigation expenditures. Our results unveil a hidden virtue of limited fee shifting, showing that an increase in such limit may lead to a desirable sorting of socially valuable litigation.

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