As globalization transforms the global economy, it is also transforming the legal environment around the world.
Outside of the United States, many countries have adopted or are considering the adoption of practices, such as class action litigation and third-party litigation financing, that could bring U.S.-style litigation abuses to foreign shores. Inside the United States, plaintiffs are trying to use U.S. courts to adjudicate and enforce cases involving conduct occurring outside U.S. territory.
Both of these trends – the “export” of U.S. practices abroad and the “import” of foreign cases into U.S. courts – could increase the spread of lawsuit abuse internationally. This should raise concerns for businesses, policymakers and the public across the globe.
Over the past 15 years, there has been a sharp rise in lawsuits brought against American companies, as well as foreign companies with a substantial U.S. presence, that are premised on alleged personal or environmental injuries occurring abroad. These cases raise the question of whether U.S. courts should be the venue for cases concerning conduct occurring outside the territory of the United States. They have also been characterized by controversial and abusive tactics by plaintiffs and their lawyers.
For a long time, lawsuit abuse was primarily a U.S. problem. But today, a number of developments are raising the risk of U.S.-style abuses spreading abroad.
One development is the spread of class actions outside the United States. To date, countries such as Canada, the UK, France, Germany, Italy, Poland, the Netherland, Japan, Korea, Hong Kong, Australia, Brazil, Chile, Argentina, and Mexico - to name a few - have all considered or already allow some form of class actions. In addition, the European Union institutions in Brussels are considering EU-wide class action systems in certain areas. While these proposals are not identical to the U.S. system, they can create opportunities for similar abuses, such as settlements that benefit lawyers rather than claimants.