Kidnap: Inside the Ransom Business.

• Author: Waugh, Christian W.

Kidnap: Inside the Ransom Business

By Anja Shortland

Reviewed by Christian W. Waugh

Every litigator has been there: explaining to a client why a frivolous case cannot just be dismissed. Usually, the reason is that all well-pled allegations must be taken as true for the purpose of a motion to dismiss, and any decent plaintiff's lawyer can frame a complaint to state a claim--whether the allegations are true or not. (Of course, insurance companies have never met the case that could not be categorized as frivolous.)

Litigators would do well to read and understand Kidnap: Inside the Ransom Business by economist Anja Shortland. In this book, Shortland describes kidnapping for ransom as a business. Looking at the incentives that each stakeholder in the kidnapping industry has, Shortland describes several characteristics that are standard in the industry across varying geography and culture. And, to my surprise, the business of kidnapping is a lot like the business of pushing a plaintiff's case! Stick with me.

It turns out that kidnapping is actually a very well-studied industry, especially by those who insure against kidnapping. Underwriters have a strong financial incentive to gather as much information on kidnapping as possible in order to gauge how much an insurance premium should be. According to Shortland, the best in the business are various underwriter syndicates at Lloyd's of London--apparently without compare in the world. It is difficult, after all, to acquire such data, but those working with Lloyd's have it.

What the author finds is that reputation and extra-legal governance lead to repeatedly successful outcomes, minimizing deaths. "People know how to behave if someone tries to abduct them, kidnappers broadly know how much the hostage [is] 'worth,' most...