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If we take the Equifax breach as an example here, and every person affected sued for even a very modest amount (say $10) and everyone wins their cases then we c
by roganartu 8y ago
If we take the Equifax breach as an example here, and every person affected sued for even a very modest amount (say $10) and everyone wins their cases then we come to something like $1.5bn in damages, plus legal costs. Sure, that will probably work in that $10 is a gross underestimate, Equifax's market cap is ~$15bn, and their legal costs defending that many cases would be significant.
However, consider that it is very likely a small minority of those ~150m affected people are actually in a position to spend the time, money, and effort in actually suing and you end up in exactly the position you are now: Equifax doing fine and suffering no penalty for their actions. Class action suits aren't really a better suggestion either because they are typically settled for pennies-on-the-dollar, with the lion's share going to the lawyers anyway.
Suing might make sense where there's a small number of affected people, or where the damages per person are much higher, but when we're talking less than $1,000 damages per person it's really just not worth each individual's time or money to do so. This is _exactly_ the kind of thing regulation is good at protecting against.
- rndmize 8y agoThings are actually even worse than you describe. There's been constant action to restrict the use of class-action lawsuits and move towards arbitration instead. https://www.reuters.com/article/us-usa-consumers-arbitration/republicans-wall-street-score-victory-in-dismantling-class-action-rule-idUSKBN1CU06F https://www.reuters.com/article/us-usa-consumers-arbitration... https://www.currentaffairs.org/2018/08/this-burrito-includes-an-arbitration-clause https://www.currentaffairs.org/2018/08/this-burrito-includes...
- emodendroket 8y agoThe fact that so many businesses want to kill class-action suits is, to me, a testament to how effective they actually are.
- emodendroket 8y agoClass-action lawsuits are the best tool we have -- even if the money each individual gets as part of a settlement is a pittance, in aggregate they do give companies at least some disincentive for unethical/illegal conduct.
- wool_gather 8y agoWhile I don't disagree that they're effective, I'd say "best" is not true. They're not any more effective than (enforced) regulation. The only difference is where the money ends up -- private sector lawyer pockets or the public coffers. All else being equal, I'd rather the latter.