But while the attorneys collect fees based on the amount of the settlement,
few allegedly injured people in the class actually claim their share of the
award . . . The court then has to decide what to do with the uncollected
funds.
. . . .
What courts often do in these cases is distribute the money, in an ad hoc
manner, to people who are not even in the class, who would not have had standing
to sue, and who were never even alleged to have been wronged. This alternative
remedy is known as cy pres, which translates to "as near as possible,"
and in theory is supposed to benefit class members.Judges, in their unlimited discretion, have occasionally been known to order a distribution to some place like their own alma mater or a public interest organization that they happen to favor.
Is the class action lawsuit another issue that is driving companies overseas? Is this something to even be concerned about? If so, what should be done? Hell if I know...I'm just trying to prep for OCI!
1 comment:
From a purely legal standpoint I can't really comment on class actions.
What my law & econ prof had to say was that they are there to prevent (or, in reality, remedy) the problems of small harms being done to large groups of people.
He used the example of Visa overcharging all balance carrying cardholders 2 cents on their bills. At that level it's not worth it for any party to sue individually, even though Visa could be making millions off such a scam. Getting the funds to the class is just as pointless at that level, a 42 cent stamp for a 2 cent judgement doesn't make much sense, does it?
The problem with recovery above highlights why I can see why judges are allowed cy pres . Sure, the cardholders don't get anything, but at least someone besides Visa is pocketing that cash.
My guess is the real reason why class actions are still around is because a better method of addressing small harms to large numbers of people hasn't reared its head yet. While injunctions can prevent future harm, I can't really think of a way to address past wrongs in these situations more effectively than through class actions.
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