NCPA - National Center for Policy Analysis

Tort Abuse

April 7, 2004

"Class-action" lawsuits are intended to help a large group of individuals. They become a potent force when gathered in a "class" by lawyers who file suit on their behalf. Frequently, however, judges in cases ranging from unsafe trucks to fee-gouging banks approve deals that lack provisions to ensure injured consumers receive fair payments, says USA Today.

Recently, some judges have tried to ensure that claims are paid diligently by linking lawyers' fees to the money consumers actually collect. Consider:

  • In a case in which music clubs had to provide discount coupons for CDs, a judge in Maine delayed granting about $850,000 in fees to lawyers last December to see how many coupons were used first.
  • Five months ago, a Maryland judge tossed out a $13-million-fee request, saying it was based on "phantom numbers."
  • The case involving late fees on phone bills had settled for $51 million, but the actual payout to consumers was less than $200,000; the judge told the lawyers to renegotiate the settlement.

When a legal process set up to protect the public from corporate wrongdoing can be abused to ensure huge fees for lawyers and puny rewards for the injured parties, it undermines public confidence in the fairness of the judicial system, explains USA Today.

Source: Editorial, "Fees line lawyers' pockets," USA Today, April 7, 2004.

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