Cleaning Up Class Action Abuse
June 20, 2008
The Washington Legal Foundation has an interesting new paper by California state Sen. Tom Harman on a class action reform bill he introduced in the state senate.
One of the many problems with class action lawsuits, Sen. Harman explains, is that after a case is won or settled, the plaintiffs’ attorney must seek out the class members – many of whom don’t even know they are part of a lawsuit – so they can receive their portion of the judgment or settlement. However, plaintiffs’ lawyers have little incentive to exert themselves on the class members’ behalf because they get paid before any plaintiff is compensated. Judgments or settlements that never make their way to class members are typically doled out to charities.
Sen. Harman proposed withholding a percentage (around 10%) of the plaintiffs’ lawyer’s fee until a judge determines that as many of the class members as possible have been found. Although the bill failed in California, Sen. Harman and WLF hopes it can serve as a model for other states trying to reform class action systems. As Sen. Harman puts it:
Fighting through the special interests to a more just legal system is a difficult and often frustrating task, but in the end, worth the effort. Class action suits are more easily subject to abuse because the injured parties often are unaware of their injuries.
Posted by Dan Pero in the categories: California, Tort Reform, Trial Lawyers
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