Consumers can usually sue corporations at a court in their own jurisdiction. Many European countries also allow class action law suits. Yet, we have few law suits against corporations. There are other reasons for this:
- consumers are not awarded punitive damages,
- court fees are higher (usually a percentage of what you ask for),
- if the consumers lose they pay not only their own lawyer, but (to an extent decided by the court) also the lawyer representing the corporation,
- many European countries have consumer "watchdogs" / ombudsmen, i.e. public entities that have the authority to start cases against corporations,
- many European countries have a variety of consumer complaint boards that handle small claims efficiently and at low cost.
Few who know consumer matters in both the US and the EU would trade the European system for the American.
The EU system seems to be very anti-consumer. Or is that what your summary statement is intended to elicit? (tough to tell, as it could mean either/or is the better system)
Class actions can be effective where the class members are relatively large, sophisticated entities. E.g. the data-breach class action brought by banks that is mentioned in the article. But in the consumer-protection space, we should consider alternatives. Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up serving neither to compensate consumers nor really to deter illegal conduct.
Notably, in the EU, the tendency is to have more "ask for permission before doing something" regulation, and less "ask for forgiveness after doing something wrong" litigation. E.g. unlike in the U.S., there are laws setting forth detailed safety requirements for consumer products, and agencies responsible for enforcing those requirements. I suspect that approach yields the desired level of product safety at lower cost than the American approach. Similar approaches could, of course, be applied to consumer financial products.
>Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up serving neither to compensate consumers nor really to deter illegal conduct.
You're completely misunderstanding the purpose of class actions, and are using an oft-repeated error. The article itself explains the value of class actions.
Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them.
This is the source of the fallacy you commit: the idea that this involves large compensation for consumers. Consumers ARE compensated in class actions, it's just that their individual harm is small so their individual payout is small.
So if, say, Comcast has been secretly overcharging customers $10/month, it's not a big enough problem for any one of them to sue. But as a class of millions of Comcast consumers, it may be worth it, and can have a real punch at that level.
This is the other part of your error: of course class actions are "lawyer-driven" because, again, the harm to any individual is small. It's the lawyers and firms pursuing the class action that are doing the work and organizing the action, often on contingency. Related to your first mistake, you and many others see the lawyers getting a big payment as "stealing" from the class when they are being compensated for the work they did and winning restitution for harms that no individual consumer would pursue, and the class members STILL get fairly compensated for the small harm done to them.
Finally, and perhaps the largest part of your error, this does and, in the US, is really the only way to, deter illegal conduct because, again, this illegal conduct is premised on the idea that it's too small for any person to care or find it worthwhile to fight. By organizing a class action you enable consumers to hit back and stop this kind of behavior, and put companies on notice that they can't try these underhanded tactics without risk.
I agree that a regulation model would be preferable to this kind of litigation, but until we have regulation we must use the litigation tools we have available.
Be very wary of screeds against class actions, they're almost certainly corporate propaganda.
It's a chicken and egg problem. Let's the see the effective government regulators start regulating before withdrawing the admittedly flawed class action lawyer-regulators.
I don't understand why binding arbitration is legal for anything ever. Having your disputes resolved in court is a fundamental right. Signing away that right in a contract should be impossible, like signing yourself into slavery.
Somewhat-serious question: If someone hands me a paper that says this, can't I just do the same and hand them a sheet that renders all arbitration bindings null and void?
Just look at how the EU consumer protection directives are working over here. You're simply not allowed to waive your guaranteed rights as a customer in some sort of EULA or TOS. And if you are forced to, the whole contract is void in it's entirety and you're free to walk away from it.
A bit off topic here but this is IMHO a great challenge for AI: making a lawyer affordable for the masses when they are bullied by banks, airlines, etc.
I sued a company where I worked. They were not paying my final dues after I left the company. It took me 1 year and lots of visits to court just to get my final dues. Finally after a year of all such waste of time, they came to me and asked for a settlement to which I agree and I got part of my money.
In India, even if you know you will win the case, it is not worth it. It will take your mental peace. Although I highly recommend to sue companies in other countries, In India we should think twice before suing anyone.
If they also had to hire consuel and appear in court, the burden was equally large on them. If everyone sued, the burden would cause change. Acceping things as they are is how you keep things bad.
There is no valid reason why a company should require someone to sign away their rights, and it absolutely should not be allowed. Otherwise individuals might as well not have those rights at all.
Capture of the machine of the justice system by the wealthy is one of the most impactful and persistent market distortions in human history.
If people cannot bring the power of government to enforce appropriate costs against players with more market power government of the People, by the People, and for the People has failed.
"First, opponents claim that plaintiffs are better served by acting individually than by joining a group lawsuit."
Then why should it matter if plaintiffs want to act collectively (ie, put themselves at a disadvantage according to the quote above)--wouldn't that benefit the opponents?
> FACT: products liability law reduced accidental deaths in the workplace. (source: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm4822a1.htm)
There is no reason similar laws wouldn't work for consumers privacy. Tort law needs to be applied aggressively to data privacy.
How exactly does that source support the FACT? The words "liable" and "liability" appear nowhere in it. They credit the reduction in workplace fatalities to a number of factors, including technology, expanded enforcement powers of federal inspectors, mandatory standards, and the creation of OSHA and NIOSH. They make no mention of product liability or tort laws.
I don't disagree with the sentiment of the article given the examples provided, i.e. Wells Fargo. That said, given the climate for frivolous lawsuits brought by "shakedown" attorneys, it opens the flood gates for something far worse.
Maybe a better compromise is to allow for binding arbitration UNLESS the company is found guilty of fraud or other illegal activity, such as Wells Fargo.
Alternatively, perhaps tort reform to prevent frivolous lawsuits would remove the need for arbitration.
I wish there was a way to preemptive lawsuit a industry, before it even undertakes a operation. Basically, a group of people bets with lawsuits on the damages done to society by a industrial operation, forcing anyone to endeavor such operations to build a huge deposit of settlement and legalfees to cover the threat - on for example cutting down "rainforrest". As state actors have proven lousy wardens on these goods of society, maybe the interest of private stakeholders might put such a bounty on the head of damaging activity's, that these cease or be replaced with less "dangerous" replacement endeavors, previously not viable in a market economy that rewards distributed short term damages to everyone.
I'd love to understand what the end hope is.
Very few class action lawsuits have resulted in any sort of permanent change.
Also note the whole reason for class action lawsuits was efficient justice, and class action lawsuits are a fairly recent creation, so that's not entirely surprising.
However the lawsuits that tend to change things tend to be "government vs".
Maybe it gives consumers a good feeling to be able to sue everyone, but is it actually helping anything?
Even in the past, people were not able to sue the telecoms or banks into having good customer service, or into not doing illegal things. Rarely, if ever, have they recouped the profits these companies made doing whatever.
Instead, all the companies just treat it as "cost of business".
I'm not sure it's really been a vehicle for effective change anymore.
Certainly arbitration won't be either, but maybe groups of super annoyed people may have better luck forcing the government into action than people placated by class actions where the government can wash its hands say "well, they already took care of it!"
Perhaps this is a situation where we shouldn't let the perfect get in the way of the good. Class actions return money to wronged parties. That's good so we should remove the arbitration cruft that is preventing that.
Probably not the perfect topic for the following question, but close enough for me to ask;
What is the deal with class action lawsuits WRT the monies lawyers get vs the plaintiffs.
I was a victim of fraudulent banking practices in 2008/2009 which resulted in the illegal foreclosure of my home in San Jose. I "won" my class action lawsuit and was "awarded"$1,100 for my victory on having a $489,000 house stolen from me by the bank. (Never missed a payment, never late, had credit score of 780 - this experience ruined me)
So I "won" that legal battle - but was unable to have my credit score fixed through the win...
So the question is: class-action lawsuit victories look to me to be a complete sham, so why would we value them as anything other than a "fuck you for not having enough money" enterprise - and where do the lawyers get off on their "right" to profit off such actions at the expense of others?
[+] [-] flexie|8 years ago|reply
Consumers can usually sue corporations at a court in their own jurisdiction. Many European countries also allow class action law suits. Yet, we have few law suits against corporations. There are other reasons for this:
- consumers are not awarded punitive damages,
- court fees are higher (usually a percentage of what you ask for),
- if the consumers lose they pay not only their own lawyer, but (to an extent decided by the court) also the lawyer representing the corporation,
- many European countries have consumer "watchdogs" / ombudsmen, i.e. public entities that have the authority to start cases against corporations,
- many European countries have a variety of consumer complaint boards that handle small claims efficiently and at low cost.
Few who know consumer matters in both the US and the EU would trade the European system for the American.
[+] [-] monksy|8 years ago|reply
The closest that we have in the US is the attorney general in your state. Don't expect a quick action from them.
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] forapurpose|8 years ago|reply
[+] [-] dclowd9901|8 years ago|reply
[+] [-] rayiner|8 years ago|reply
Notably, in the EU, the tendency is to have more "ask for permission before doing something" regulation, and less "ask for forgiveness after doing something wrong" litigation. E.g. unlike in the U.S., there are laws setting forth detailed safety requirements for consumer products, and agencies responsible for enforcing those requirements. I suspect that approach yields the desired level of product safety at lower cost than the American approach. Similar approaches could, of course, be applied to consumer financial products.
[+] [-] Sangermaine|8 years ago|reply
You're completely misunderstanding the purpose of class actions, and are using an oft-repeated error. The article itself explains the value of class actions.
Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them.
This is the source of the fallacy you commit: the idea that this involves large compensation for consumers. Consumers ARE compensated in class actions, it's just that their individual harm is small so their individual payout is small.
So if, say, Comcast has been secretly overcharging customers $10/month, it's not a big enough problem for any one of them to sue. But as a class of millions of Comcast consumers, it may be worth it, and can have a real punch at that level.
This is the other part of your error: of course class actions are "lawyer-driven" because, again, the harm to any individual is small. It's the lawyers and firms pursuing the class action that are doing the work and organizing the action, often on contingency. Related to your first mistake, you and many others see the lawyers getting a big payment as "stealing" from the class when they are being compensated for the work they did and winning restitution for harms that no individual consumer would pursue, and the class members STILL get fairly compensated for the small harm done to them.
Finally, and perhaps the largest part of your error, this does and, in the US, is really the only way to, deter illegal conduct because, again, this illegal conduct is premised on the idea that it's too small for any person to care or find it worthwhile to fight. By organizing a class action you enable consumers to hit back and stop this kind of behavior, and put companies on notice that they can't try these underhanded tactics without risk.
I agree that a regulation model would be preferable to this kind of litigation, but until we have regulation we must use the litigation tools we have available.
Be very wary of screeds against class actions, they're almost certainly corporate propaganda.
[+] [-] bradleyjg|8 years ago|reply
[+] [-] revelation|8 years ago|reply
It mostly fixes the whole "read this and click continue" insanity because it makes any clause that isn't law anyway unviable.
[+] [-] emodendroket|8 years ago|reply
[+] [-] hedora|8 years ago|reply
Also, by reading this you agree all disputes between us will go through an arbitration firm of my choosing.
[+] [-] mikeash|8 years ago|reply
[+] [-] dclowd9901|8 years ago|reply
[+] [-] slededit|8 years ago|reply
[+] [-] nobodyorother|8 years ago|reply
[+] [-] mxfh|8 years ago|reply
[+] [-] wimgz|8 years ago|reply
A bit off topic here but this is IMHO a great challenge for AI: making a lawyer affordable for the masses when they are bullied by banks, airlines, etc.
If it costs you $5 , why not sue for $30 ?
[+] [-] leoharsha2|8 years ago|reply
In India, even if you know you will win the case, it is not worth it. It will take your mental peace. Although I highly recommend to sue companies in other countries, In India we should think twice before suing anyone.
[+] [-] damnfine|8 years ago|reply
[+] [-] s73ver_|8 years ago|reply
[+] [-] clavalle|8 years ago|reply
If people cannot bring the power of government to enforce appropriate costs against players with more market power government of the People, by the People, and for the People has failed.
[+] [-] coolaliasbro|8 years ago|reply
Then why should it matter if plaintiffs want to act collectively (ie, put themselves at a disadvantage according to the quote above)--wouldn't that benefit the opponents?
[+] [-] rrggrr|8 years ago|reply
There is no reason similar laws wouldn't work for consumers privacy. Tort law needs to be applied aggressively to data privacy.
[+] [-] 6502nerdface|8 years ago|reply
How exactly does that source support the FACT? The words "liable" and "liability" appear nowhere in it. They credit the reduction in workplace fatalities to a number of factors, including technology, expanded enforcement powers of federal inspectors, mandatory standards, and the creation of OSHA and NIOSH. They make no mention of product liability or tort laws.
[+] [-] jseliger|8 years ago|reply
[+] [-] redm|8 years ago|reply
Maybe a better compromise is to allow for binding arbitration UNLESS the company is found guilty of fraud or other illegal activity, such as Wells Fargo.
Alternatively, perhaps tort reform to prevent frivolous lawsuits would remove the need for arbitration.
[+] [-] Pica_soO|8 years ago|reply
[+] [-] nmca|8 years ago|reply
[+] [-] ct520|8 years ago|reply
http://levelplayingfield.io/
[+] [-] DannyBee|8 years ago|reply
Maybe it gives consumers a good feeling to be able to sue everyone, but is it actually helping anything?
Even in the past, people were not able to sue the telecoms or banks into having good customer service, or into not doing illegal things. Rarely, if ever, have they recouped the profits these companies made doing whatever. Instead, all the companies just treat it as "cost of business". I'm not sure it's really been a vehicle for effective change anymore.
Certainly arbitration won't be either, but maybe groups of super annoyed people may have better luck forcing the government into action than people placated by class actions where the government can wash its hands say "well, they already took care of it!"
[+] [-] frgtpsswrdlame|8 years ago|reply
[+] [-] samstave|8 years ago|reply
What is the deal with class action lawsuits WRT the monies lawyers get vs the plaintiffs.
I was a victim of fraudulent banking practices in 2008/2009 which resulted in the illegal foreclosure of my home in San Jose. I "won" my class action lawsuit and was "awarded"$1,100 for my victory on having a $489,000 house stolen from me by the bank. (Never missed a payment, never late, had credit score of 780 - this experience ruined me)
So I "won" that legal battle - but was unable to have my credit score fixed through the win...
So the question is: class-action lawsuit victories look to me to be a complete sham, so why would we value them as anything other than a "fuck you for not having enough money" enterprise - and where do the lawyers get off on their "right" to profit off such actions at the expense of others?
[+] [-] socrates1998|8 years ago|reply
[+] [-] richardknop|8 years ago|reply
[+] [-] kazagistar|8 years ago|reply
[+] [-] Khol|8 years ago|reply
[+] [-] wbracken|8 years ago|reply
https://www.consumerfinancemonitor.com/2017/08/22/director-c...