4 ms·
I don't believe scope insensitivity is a major factor in class action awards. Believe me, class action plaintiff attorneys are not falling victim to any psycho
by zeroinfish 14y ago
I don't believe scope insensitivity is a major factor in class action awards.
Believe me, class action plaintiff attorneys are not falling victim to any psychological quirk that makes them underestimate what the size of the verdict should be. They get paid based on the size of the verdict and are therefore fully adept at imagining every reason why the verdict should be very large. They make these arguments quite clear to the court, and as you say it's frequently by attempting to couch the verdict in terms of benefit per member of the class.
The real reason for small awards is that most of these large cases end in settlements, not verdicts. And plaintiffs have an incentive to settle for much less than the full value of their claim. This is because there is risk (usually quite a lot) in taking a case to trial, so you must discount your expected verdict by the risk you will lose at trial and get nothing.
In addition, it's very hard to prove damage in class actions. You need to show that all members of the class (or at least large groups) suffered very similar damage. If damages vary by individual, then individual proof is required (this makes sense, part of a case is proving your damages) and you will lose your right to proceed as a class action. If that happens, it's basically like coming away with no money, so plaintiff lawyers can't always claim every dollar that might be on the table. They stick to the claims that they can apply on a class-wide (or close) basis.
Ultimately settlements are about taking a sure deal for less money rather than taking a risk to try to get the full amount you believe you are entitled to. That's the way settlements work, and that's often a good deal for the class.