5 ms·

>Class actions have a very important place in the law, and they are a thing in parts of Europe[1], and are becoming more so, because they serve a very important

>Class actions have a very important place in the law, and they are a thing in parts of Europe[1], and are becoming more so, because they serve a very important need[2]. It gets abused, but so does everything in the legal system, that doesn't mean it's inherently a bad idea. My view on it is a way for lawyers to make big money by recruiting clients not the other way around. It gives the impression, that it is all about the money, not about being right. In Germany there is a thing called "Nebenklage" ("accessory prosecution"), which makes it possible for individuals to join the state attorney, once he started a lawsuit. This is how big scandals are handled and victims can get compensations without lawyers fishing for clients.

kbenson 10y ago
> My view on it is a way for lawyers to make big money by recruiting clients not the other way around. It started out as a way to hold companies responsible for small amounts of harm that are spread out to many individuals. Is it worth it for any one individual to sue a company for a $5 product that purposefully misleads consumers? Is it okay for a company to take advantage of consumers in this way purely because they are unlikely to be called upon to account for their misbehavior? That's the reasoning behind a class action lawsuits. Allow many people to join together to act as a counterbalance to companies flaunting their relative position of power. Regulation is the other way to deal with this, but regulation often lags abuse, and why regulate specifically what is already against the law and just needs an enforcement mechanism?
- distances 10y ago
  The European view of ridiculous US class-action suits is probably mostly thanks to cases where there's a huge number of people in the suit, the lawyer gets free hands, and the result is $5 compensation and a movie ticket (upon written request accompanied by proof of purchase). The lawyer's cut is $3 million in legal fees, paid by the company to avoid a larger settlement. This was probably an exaggeration, but that's the image one gets.
  - kbenson 10y ago
    Even that serves a purpose. If you view the case as specifically to compensate people for the wrong, then it seems ridiculous, but if it's to make people feel like the company had to pay for their mistake and/or disincentivize the behavior in that and other companies, it serves a purpose. Do lawyers get too large a cut? Possibly, but remember that they are sometimes going up against large companies with deep pockets, and these cases may cost lots of money. Do we want to incentivize law firms to take these cases, even if they may not pay off? Yes. Do we want to incentivize them so much that they seek out claimants to create lawsuits for? Probably not, but again, if it keeps companies from trying to circumvent the law, it may not be entirely a bad thing. > The lawyer gets free hands ... The lawyer's cut is $3 million in legal fees, paid by the company to avoid a larger settlement AFAIK there has to be actual named defendants that represent the class, and they would decide on whether to accept a settlement. The lawyers can only advise, not decide. I'm by no means an expert though. Edit: Clarified what I was responding to in second part by including more context.
  - slededit 10y ago
    I had that except my $0.50 was donated to charity (this was mandated as part of the settlement).
allendoerfer 10y ago
Thread limit reached: >It started out as a way to hold companies responsible for small amounts of harm that are spread out to many individuals. Is it worth it for any one individual to sue a company for a $5 product that purposefully misleads consumers? Is it okay for a company to take advantage of consumers in this way purely because they are unlikely to be called upon to account for their misbehavior? That's the reasoning behind a class action lawsuits. Allow many people to join together to act as a counterbalance to companies flaunting their relative position of power. Regulation is the other way to deal with this, but regulation often lags abuse, and why regulate specifically what is already against the law and just needs an enforcement mechanism? Thanks for clarifying, I learned something new. I think ideally you would have as little regulation as possible and inspectors + fines for highly critical stuff, so courts and consumers will not have to deal with this at all.
- kbenson 10y ago
  > Thread limit reached: Clicking on the perma-link to the comment in question will generally allow replying. It's a soft limitation. > I think ideally you would have as little regulation as possible and inspectors + fines for highly critical stuff, so courts and consumers will not have to deal with this at all. I agree that that as little regulation as possible would be better, simply because regulation generally seems to also create perverse incentives, so when you can incentivize the behavior you want without it you are probably better off. Unfortunately, fine and inspectors are regulation. They make sense in some areas (such as food and building inspection), but I don't think it's feasible to expect that to work for every type of problem, for every type of industry, when we don't even know everywhere they would be useful now, much less the future. So, we have class-actions as a fail-safe.

kbenson 10y ago

> My view on it is a way for lawyers to make big money by recruiting clients not the other way around. It started out as a way to hold companies responsible for small amounts of harm that are spread out to many individuals. Is it worth it for any one individual to sue a company for a $5 product that purposefully misleads consumers? Is it okay for a company to take advantage of consumers in this way purely because they are unlikely to be called upon to account for their misbehavior? That's the reasoning behind a class action lawsuits. Allow many people to join together to act as a counterbalance to companies flaunting their relative position of power. Regulation is the other way to deal with this, but regulation often lags abuse, and why regulate specifically what is already against the law and just needs an enforcement mechanism?

distances 10y ago
The European view of ridiculous US class-action suits is probably mostly thanks to cases where there's a huge number of people in the suit, the lawyer gets free hands, and the result is $5 compensation and a movie ticket (upon written request accompanied by proof of purchase). The lawyer's cut is $3 million in legal fees, paid by the company to avoid a larger settlement. This was probably an exaggeration, but that's the image one gets.
- kbenson 10y ago
  Even that serves a purpose. If you view the case as specifically to compensate people for the wrong, then it seems ridiculous, but if it's to make people feel like the company had to pay for their mistake and/or disincentivize the behavior in that and other companies, it serves a purpose. Do lawyers get too large a cut? Possibly, but remember that they are sometimes going up against large companies with deep pockets, and these cases may cost lots of money. Do we want to incentivize law firms to take these cases, even if they may not pay off? Yes. Do we want to incentivize them so much that they seek out claimants to create lawsuits for? Probably not, but again, if it keeps companies from trying to circumvent the law, it may not be entirely a bad thing. > The lawyer gets free hands ... The lawyer's cut is $3 million in legal fees, paid by the company to avoid a larger settlement AFAIK there has to be actual named defendants that represent the class, and they would decide on whether to accept a settlement. The lawyers can only advise, not decide. I'm by no means an expert though. Edit: Clarified what I was responding to in second part by including more context.
- slededit 10y ago
  I had that except my $0.50 was donated to charity (this was mandated as part of the settlement).

allendoerfer 10y ago

Thread limit reached: >It started out as a way to hold companies responsible for small amounts of harm that are spread out to many individuals. Is it worth it for any one individual to sue a company for a $5 product that purposefully misleads consumers? Is it okay for a company to take advantage of consumers in this way purely because they are unlikely to be called upon to account for their misbehavior? That's the reasoning behind a class action lawsuits. Allow many people to join together to act as a counterbalance to companies flaunting their relative position of power. Regulation is the other way to deal with this, but regulation often lags abuse, and why regulate specifically what is already against the law and just needs an enforcement mechanism? Thanks for clarifying, I learned something new. I think ideally you would have as little regulation as possible and inspectors + fines for highly critical stuff, so courts and consumers will not have to deal with this at all.

kbenson 10y ago
> Thread limit reached: Clicking on the perma-link to the comment in question will generally allow replying. It's a soft limitation. > I think ideally you would have as little regulation as possible and inspectors + fines for highly critical stuff, so courts and consumers will not have to deal with this at all. I agree that that as little regulation as possible would be better, simply because regulation generally seems to also create perverse incentives, so when you can incentivize the behavior you want without it you are probably better off. Unfortunately, fine and inspectors are regulation. They make sense in some areas (such as food and building inspection), but I don't think it's feasible to expect that to work for every type of problem, for every type of industry, when we don't even know everywhere they would be useful now, much less the future. So, we have class-actions as a fail-safe.