Would it be possible to set up a fund that pays people for the damages they incurred for a lawsuit where they end up being innocent? That way the EA community could make it less risky for those who haven’t spoken up, and also signal how valuable their information is to them.
Yes, although it is likely cheaper (in expected costs) and otherwise superior to make a ~unconditional offer to cover at least the legal fees for would-be speakers. The reason is that an externally legible, credible guarantee of legal-expense coverage ordinarily acts as a strong deterrent to bringing a weak lawsuit in the first place. As implied by my prior comment, one of the main tools in the plaintiff’s arsenal is to bully a defendant in a weak case to settle by threatening them with liability for massive legal bills. If you take that tactic way by making the defendant ~insensitive to the size of their legal bills, you should stop a lot of suits from ever being brought in the first place. Rather, one would expect would-be plaintiffs to sue only if the expected value of their suit (e.g., the odds of winning and collecting on a judgment multiplied by judgment size) exceed the expected costs of litigating to trial (or to a point at which the defendant decides to settle without factoring in legal bills). If you think the odds of plaintiff success at trial are low and/or that the would-be individual defendant doesn’t have a ton of assets to collect from, then the most likely number of lawsuits is zero.[1]
That does tip the balance of abstract fairness toward defendants and away from plaintiffs. But that can be appropriate in some cases. As noted in an earlier comment of mine, personal-liability regimes underproduce public goods because the public goods are enjoyed by the public while the risk is borne by the individual. Litigation immunities (especially “qualified immunity” in the US) can be a controversial topic, but they reflect that kind of rationale. In some cases, society would rather limit or foreclose someone’s ability to collect damages for torts they suffered than squelch the willingness to provide public goods.
One might not want to extend this offer to those for whom you have a higher degree of suspicion that they did something they really should be sued for, or to those who you think face a high probability of being sued even without speaking up.
This is why you wouldn’t want to bind yourself to indemnify defendants who lost for their judgments. Doing so would create a much larger target on their backs, as the upside from litigation would no longer be limited to what the plaintiff could collect from the defendant. In the worst-case scenario in which a defendant loses unjustly, there are ways for third parties to protect the defendant without further enriching the plaintiff (e.g., making gifts after bankruptcy discharge, well-designed trusts).
Would it be possible to set up a fund that pays people for the damages they incurred for a lawsuit where they end up being innocent? That way the EA community could make it less risky for those who haven’t spoken up, and also signal how valuable their information is to them.
Yes, although it is likely cheaper (in expected costs) and otherwise superior to make a ~unconditional offer to cover at least the legal fees for would-be speakers. The reason is that an externally legible, credible guarantee of legal-expense coverage ordinarily acts as a strong deterrent to bringing a weak lawsuit in the first place. As implied by my prior comment, one of the main tools in the plaintiff’s arsenal is to bully a defendant in a weak case to settle by threatening them with liability for massive legal bills. If you take that tactic way by making the defendant ~insensitive to the size of their legal bills, you should stop a lot of suits from ever being brought in the first place. Rather, one would expect would-be plaintiffs to sue only if the expected value of their suit (e.g., the odds of winning and collecting on a judgment multiplied by judgment size) exceed the expected costs of litigating to trial (or to a point at which the defendant decides to settle without factoring in legal bills). If you think the odds of plaintiff success at trial are low and/or that the would-be individual defendant doesn’t have a ton of assets to collect from, then the most likely number of lawsuits is zero.[1]
That does tip the balance of abstract fairness toward defendants and away from plaintiffs. But that can be appropriate in some cases. As noted in an earlier comment of mine, personal-liability regimes underproduce public goods because the public goods are enjoyed by the public while the risk is borne by the individual. Litigation immunities (especially “qualified immunity” in the US) can be a controversial topic, but they reflect that kind of rationale. In some cases, society would rather limit or foreclose someone’s ability to collect damages for torts they suffered than squelch the willingness to provide public goods.
One might not want to extend this offer to those for whom you have a higher degree of suspicion that they did something they really should be sued for, or to those who you think face a high probability of being sued even without speaking up.
This is why you wouldn’t want to bind yourself to indemnify defendants who lost for their judgments. Doing so would create a much larger target on their backs, as the upside from litigation would no longer be limited to what the plaintiff could collect from the defendant. In the worst-case scenario in which a defendant loses unjustly, there are ways for third parties to protect the defendant without further enriching the plaintiff (e.g., making gifts after bankruptcy discharge, well-designed trusts).