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To be fair, class action suits aren't really about recovering damages for the class members. Or at least, not entirely. That's almost incidental. Rather, they'r

To be fair, class action suits aren't really about recovering damages for the class members. Or at least, not entirely. That's almost incidental. Rather, they're most often about leveraging a large class of injured parties--whose injuries are usually relatively minor on an individual basis--to force a change of behavior by adding up all of those small injuries. The cost of pursuing each claim individually would usually be sufficiently high as to make pursuing a claim unviable. The behavior would remain uncorrected, and the injured parties would receive neither compensation nor the knowledge that the behavior has been altered or eliminated. Nobody wins in that situation. And while it's almost inevitable that discussions about class action suits will involve complaints about the lawyers fees, that's not really fair. Mass tort litigation is complex and involves significant investments of time and resources on the part of the attorneys involved. Especially if they actually make it to trial. It might seem unfair at first glance, but it enables the class to access the legal system and justice where it otherwise would not. They may be imperfect, but they're a hell of a lot better than the alternative and have had a profound positive impact on our society.

paulgb 9y ago
Exactly. It's hard to measure the value of class actions without knowing how the behavior of companies would change without them. I expect we'll see that natural experiment play out now that arbitration clauses are commonplace.
prklmn 9y ago
Your first point is only sometimes valid as damages do depend on the severity of the injury, just as in any other case. See http://www.nytimes.com/1999/10/08/business/fen-phen-maker-to-pay-billions-in-settlement-of-diet-injury-cases.html http://www.nytimes.com/1999/10/08/business/fen-phen-maker-to... for a class action suit involving serious injury.
hueving 9y ago
>And while it's almost inevitable that discussions about class action suits will involve complaints about the lawyers fees, that's not really fair. Of course it's fair. It's not like the members of the class get to shop around for cheaper lawyers. The class gets shit either way, they just have to decide if they hate the company more than the lawyers that charge the obscene percentages. And you can't make any kind of cost argument because a billion dollar case isn't anymore complex than a million dollar case. The whole point of it being a class is that it impacted everyone the same so the dollar figures don't change the complexity.
- rayiner 9y ago
  Attorneys' fees in a class action have to be approved by the court, and for large class actions the percentage fee tends to be lower than what a privately-retained lawyer would receive. The privately-retained lawyers in NTP's lawsuit against Blackberry got an approximately 1/3 payout of a $600 million settlement. 20-33% is quite typical in a pure contingency situation. Most court-approved fee awards in class actions that large ($100m+) tend to be a lot lower than that, in the 10-20% range. Courts usually will demand that attorneys submit their billing records (or summaries thereof) along with their fee petitions, and will regularly cut down any fee requests that exceed a certain multiple of what the attorneys invested in the case. This case is typical: https://www.paymentcardsettlement.com/Content/Documents/Order%20Granting%20Attorneys%20Fees.pdf https://www.paymentcardsettlement.com/Content/Documents/Orde.... $5.7 billion settlement, about $500 million in attorneys' fees, or less than 10% of the fund. $160 million worth of time invested by the attorneys to get to that point. > And you can't make any kind of cost argument because a billion dollar case isn't anymore complex than a million dollar case. That's not true at all. Big dollar value cases involve either large harms to relatively fewer people, or relatively small harms to large numbers of people. The former kind of case often involves complex subject matter, such as financial transactions, medicines, etc. The latter kind of case often involves a very diverse class and complex issues of causation and damages. Consider the TicketMaster lawsuit: the basic theory of damages is that class members would not have purchased the tickets had they known that TicketMaster was marking up things like UPS charges. Well, clearly lots of class members would have purchased the tickets anyway. Coming up with a realistic damages model in that scenario is difficult. Furthermore, in big consumer class actions like that you've got class members in fifty states with fifty different sets of laws.
  - tptacek 9y ago
    Is it weird to also observe that the opposition in a billion dollar case will be significantly more expensive to overcome than in a million dollar case? It seems obvious to me that billion-dollar cases would be more expensive to pursue.
    - rayiner 9y ago
dhimes 9y ago
To be fair, class action suits aren't really about recovering damages for the class members. Or at least, not entirely. That was exactly what they were supposed to be about. The way it usually works out, however, is that the lawyers don't really negotiate on the same side of the table as the class and the class members end up with very little. The lawyers, however, get their fees. That's why everybody gets pissed about it. There are other legal remedies to force a change of behavior. If the lawyer wants to use my name (as a class member) for leverage in the suit, he or she should be representing me. The class action is something that is supposed to be for the class members' advantage- working as a group for legal remedy. The tradeoff is you don't get as much legal remedy as you may have had you footed the entire bill and risk of a lawsuit yourself. But some of the negotiated remedies are, indeed, a joke.
- JumpCrisscross 9y ago
  > If the lawyer wants to use my name (as a class member) for leverage in the suit, he or she should be representing me If you're paying them they're representing you. If they spend a single client's or their own time building a case, they're not representing you. They are representing your class. If you want to be represented, opt out and hire a lawyer.
- Sangermaine 9y ago
  >That was exactly what they were supposed to be about. No, they really aren't, because as the parent says class actions are appropriate where the harm to each individual class member is small, but the small harm is spread out to many people. You as an individual were not harmed much, so you as an individual would not collect much even if you went it alone and recovered 100%. Litigation doesn't (generally) yield more than the harm you suffered. Besides, if you want a lawyer to represent your interests alone, then you are free to not join the class and pursue your own individual case with the lawyer(s) of your choosing.
  - unclebucknasty 9y ago
    >pursue your own individual case with the lawyer(s) of your choosing Fewer people than most realize are actually able to do this. Good lawyers don't generally take contingency cases, and if the case is even remotely involved, fees quickly reach to six figures. Perhaps worse is the stress. Once initiated, you have virtually no control over the process, and it can take over your life. The motions and counter-motions, delays and hearings will wear you down. If the adversary is much better-funded, then they can make it nearly unbearable. The legal system is not what most people imagine, especially those who flippantly threaten to sue. You have to go through an action (or be close to someone who is) to really get that. Engaging is stressful and costly and, unless you're a combative type with deep pockets who just loves to fight, you'll likely feel like you lost, no matter the outcome. This, as much as anything, is why class actions are so prevalent.
bradleyjg 9y ago
> They may be imperfect, but they're a hell of a lot better than the alternative and have had a profound positive impact on our society. No, it isn't better than the alternative. The alternative is to have regulators selected and overseen by elected officials regulate the behavior of companies. We instead of a system of regulation by self appointed ad hoc lawyer-regulators negotiating settlements they think will get past the judge overseeing their case and allow them to collect a fee. The latter is perhaps better than nothing, but it isn't better than the alternative which happens to be in place in the rest of the developed world.
- wlesieutre 9y ago
  Regulators selected and overseen by elected officials aren't a foolproof solution either. Sometimes you end up with Scott Pruitt [1] running the EPA, whose objectives are apparently a) denying that climate change exists, and b) dismantling any environmental protections that businesses find inconvenient. The self-appointed lawyer regulators at least have an incentive to do their jobs: they get a bunch of money. [1] https://en.wikipedia.org/wiki/Scott_Pruitt https://en.wikipedia.org/wiki/Scott_Pruitt
  - Bud 9y ago
    He didn't say foolproof; he said better.
    - jacquesm 9y ago
      That was his point. Pruitt is not better.
- syshum 9y ago
  Yes because regulation is working out really well That is why I have plenty of competition for Internet Access and Net Neutrality is vigorously enforced That is why the FTC routinely issues fines for False Advertisers for all the false claims that are made daily in ads That is why there are plenty of bankers in jail for crashing the economy in 2007, Government regulation is grand
kelnos 9y ago
> It might seem unfair at first glance, but it enables the class to access the legal system and justice where it otherwise would not. The fact that it requires so much expertise and money to "access the legal system" in this way is in itself incredibly unfair and unjust. It's a completely broken system.
- umanwizard 9y ago
  Yeah, but how can that be solved? The law is very complex in any advanced country (I'd argue necessarily so), and requires specialists to navigate it.

paulgb 9y ago

Exactly. It's hard to measure the value of class actions without knowing how the behavior of companies would change without them. I expect we'll see that natural experiment play out now that arbitration clauses are commonplace.

prklmn 9y ago

Your first point is only sometimes valid as damages do depend on the severity of the injury, just as in any other case. See http://www.nytimes.com/1999/10/08/business/fen-phen-maker-to-pay-billions-in-settlement-of-diet-injury-cases.html http://www.nytimes.com/1999/10/08/business/fen-phen-maker-to... for a class action suit involving serious injury.

hueving 9y ago

>And while it's almost inevitable that discussions about class action suits will involve complaints about the lawyers fees, that's not really fair. Of course it's fair. It's not like the members of the class get to shop around for cheaper lawyers. The class gets shit either way, they just have to decide if they hate the company more than the lawyers that charge the obscene percentages. And you can't make any kind of cost argument because a billion dollar case isn't anymore complex than a million dollar case. The whole point of it being a class is that it impacted everyone the same so the dollar figures don't change the complexity.

rayiner 9y ago
Attorneys' fees in a class action have to be approved by the court, and for large class actions the percentage fee tends to be lower than what a privately-retained lawyer would receive. The privately-retained lawyers in NTP's lawsuit against Blackberry got an approximately 1/3 payout of a $600 million settlement. 20-33% is quite typical in a pure contingency situation. Most court-approved fee awards in class actions that large ($100m+) tend to be a lot lower than that, in the 10-20% range. Courts usually will demand that attorneys submit their billing records (or summaries thereof) along with their fee petitions, and will regularly cut down any fee requests that exceed a certain multiple of what the attorneys invested in the case. This case is typical: https://www.paymentcardsettlement.com/Content/Documents/Order%20Granting%20Attorneys%20Fees.pdf https://www.paymentcardsettlement.com/Content/Documents/Orde.... $5.7 billion settlement, about $500 million in attorneys' fees, or less than 10% of the fund. $160 million worth of time invested by the attorneys to get to that point. > And you can't make any kind of cost argument because a billion dollar case isn't anymore complex than a million dollar case. That's not true at all. Big dollar value cases involve either large harms to relatively fewer people, or relatively small harms to large numbers of people. The former kind of case often involves complex subject matter, such as financial transactions, medicines, etc. The latter kind of case often involves a very diverse class and complex issues of causation and damages. Consider the TicketMaster lawsuit: the basic theory of damages is that class members would not have purchased the tickets had they known that TicketMaster was marking up things like UPS charges. Well, clearly lots of class members would have purchased the tickets anyway. Coming up with a realistic damages model in that scenario is difficult. Furthermore, in big consumer class actions like that you've got class members in fifty states with fifty different sets of laws.
- tptacek 9y ago
  Is it weird to also observe that the opposition in a billion dollar case will be significantly more expensive to overcome than in a million dollar case? It seems obvious to me that billion-dollar cases would be more expensive to pursue.
  - rayiner 9y ago

dhimes 9y ago

To be fair, class action suits aren't really about recovering damages for the class members. Or at least, not entirely. That was exactly what they were supposed to be about. The way it usually works out, however, is that the lawyers don't really negotiate on the same side of the table as the class and the class members end up with very little. The lawyers, however, get their fees. That's why everybody gets pissed about it. There are other legal remedies to force a change of behavior. If the lawyer wants to use my name (as a class member) for leverage in the suit, he or she should be representing me. The class action is something that is supposed to be for the class members' advantage- working as a group for legal remedy. The tradeoff is you don't get as much legal remedy as you may have had you footed the entire bill and risk of a lawsuit yourself. But some of the negotiated remedies are, indeed, a joke.

JumpCrisscross 9y ago
> If the lawyer wants to use my name (as a class member) for leverage in the suit, he or she should be representing me If you're paying them they're representing you. If they spend a single client's or their own time building a case, they're not representing you. They are representing your class. If you want to be represented, opt out and hire a lawyer.
Sangermaine 9y ago
>That was exactly what they were supposed to be about. No, they really aren't, because as the parent says class actions are appropriate where the harm to each individual class member is small, but the small harm is spread out to many people. You as an individual were not harmed much, so you as an individual would not collect much even if you went it alone and recovered 100%. Litigation doesn't (generally) yield more than the harm you suffered. Besides, if you want a lawyer to represent your interests alone, then you are free to not join the class and pursue your own individual case with the lawyer(s) of your choosing.
- unclebucknasty 9y ago
  >pursue your own individual case with the lawyer(s) of your choosing Fewer people than most realize are actually able to do this. Good lawyers don't generally take contingency cases, and if the case is even remotely involved, fees quickly reach to six figures. Perhaps worse is the stress. Once initiated, you have virtually no control over the process, and it can take over your life. The motions and counter-motions, delays and hearings will wear you down. If the adversary is much better-funded, then they can make it nearly unbearable. The legal system is not what most people imagine, especially those who flippantly threaten to sue. You have to go through an action (or be close to someone who is) to really get that. Engaging is stressful and costly and, unless you're a combative type with deep pockets who just loves to fight, you'll likely feel like you lost, no matter the outcome. This, as much as anything, is why class actions are so prevalent.

bradleyjg 9y ago

> They may be imperfect, but they're a hell of a lot better than the alternative and have had a profound positive impact on our society. No, it isn't better than the alternative. The alternative is to have regulators selected and overseen by elected officials regulate the behavior of companies. We instead of a system of regulation by self appointed ad hoc lawyer-regulators negotiating settlements they think will get past the judge overseeing their case and allow them to collect a fee. The latter is perhaps better than nothing, but it isn't better than the alternative which happens to be in place in the rest of the developed world.

wlesieutre 9y ago
Regulators selected and overseen by elected officials aren't a foolproof solution either. Sometimes you end up with Scott Pruitt [1] running the EPA, whose objectives are apparently a) denying that climate change exists, and b) dismantling any environmental protections that businesses find inconvenient. The self-appointed lawyer regulators at least have an incentive to do their jobs: they get a bunch of money. [1] https://en.wikipedia.org/wiki/Scott_Pruitt https://en.wikipedia.org/wiki/Scott_Pruitt
- Bud 9y ago
  He didn't say foolproof; he said better.
  - jacquesm 9y ago
    That was his point. Pruitt is not better.
syshum 9y ago
Yes because regulation is working out really well That is why I have plenty of competition for Internet Access and Net Neutrality is vigorously enforced That is why the FTC routinely issues fines for False Advertisers for all the false claims that are made daily in ads That is why there are plenty of bankers in jail for crashing the economy in 2007, Government regulation is grand

kelnos 9y ago

> It might seem unfair at first glance, but it enables the class to access the legal system and justice where it otherwise would not. The fact that it requires so much expertise and money to "access the legal system" in this way is in itself incredibly unfair and unjust. It's a completely broken system.

umanwizard 9y ago
Yeah, but how can that be solved? The law is very complex in any advanced country (I'd argue necessarily so), and requires specialists to navigate it.