Lawsuits Go Global

Should we allow the worst parts of the American legal system to expand beyond U.S. boundaries? The United States has become notorious for excessive litigation. All too often, American lawsuits line the pockets of entrepreneurial attorneys, while their clients get just pennies on the dollar.

Part of the reason litigation in the U.S. is so out of control is class action litigation, a well-intentioned concept rife with unintended consequences. Class actions were intended to allow multiple people with the same claim to file one joint lawsuit. Policymakers believed that it would simplify the legal system and increase access to justice for consumers. 

Unfortunately, they were wrong. Class action litigation has become a lawyer-driven business – attorneys seek out reasons to sue and then file on behalf of thousands of consumers who do not even know they are part of the case. In the end, the lawyers are able to pressure defendants to settle because, even when they have done nothing wrong, going to court is too risky and expensive. The lawyers then take a large cut of the settlement money, often leaving their clients with just a few dollars each, if they get anything at all.

Now, policymakers outside the United States are on the brink of making the same mistake. Leaders around the world are considering policies that would encourage a U.S.-style litigation market, which would burden businesses in a difficult economy without creating any value for the consumers. 

As a result, the U.S. Chamber Institute for Legal Reform (ILR) – an affiliate of the U.S. Chamber of Commerce that seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels – has launched an international campaign to inform policymakers about the consequences of importing U.S.-style litigation features.