Class Actions Around the Globe

The United States is notorious for excessive litigation. A 2013 study by NERA Economic Consulting revealed that the U.S. has the highest liability costs as a percentage of GDP of the countries surveyed, with liability costs at 2.6 times the average level of the Eurozone economies. Unfortunately, many foreign governments are considering adopting one of the most problematic features of the U.S. lawsuit system – class actions. read more...

Class actions permit multiple claimants with the same claim to file a single lawsuit. Well-intentioned policymakers believed this would increase efficiency and access to justice. 

Unfortunately, they were wrong. Class action litigation has become a lawyer-driven business in which lawyers seek out reasons to sue and then file on behalf of hundreds or thousands of claimants. In the “opt-out” system, where claimants are in the case unless they take the initiative to remove themselves, most do not even know they are litigants. With so many claimants, the potential for huge damages looms large. Companies often settle meritless claims because taking the case to trial is risky, expensive, time-consuming and damaging to their reputation.

At the same time, class action settlements often provide little or no benefit to claimants. An April 2013 U.S. national opinion survey revealed that only 14% of those who were part of a class action lawsuit reported having received something of value, such as a cashed check or redeemed coupon. Four in five voters involved in a civil lawsuit said that lawyers benefit the most from class actions.

Some policymakers outside the United States are considering proposals to allow class actions, further burdening businesses in a difficult global economy while creating little, if any, real value for consumers. While some class action proposals differ in certain ways from the U.S. model, not every aspect of the American system needs to be present to create an unbalanced system with U.S.-type abuses. 

American businesses have experienced the class action system for many years and understand its perils. As a result, ILR is urging policymakers in Europe (both in individual countries and at the EU level), Asia, and Latin America to think twice before adopting opt-out class actions.

 

Research

The ILR Research Review - Spring 2017

May 08, 2017 | This edition of the ILR Research Review offers valuable insights from ILR's recent research on the latest trends in litigation and the tactics and strategies entrepreneurial plaintiffs' firms are using to expand their business models and bring more lawsuits in local, state, federal, and international courts.

The Growth of Collective Redress in the EU: A Survey of Developments in 10 Member States

March 21, 2017 | This paper examines the 'state of play' of collective redress in 10 Member States in the EU and suggests minimum necessary safeguards to prevent litigation abuse taking hold in Europe.

All Results for Class Actions Around the Globe

In the News Today - September 14, 2015

September 14, 2015 | News and Blog

ILR President Lisa A. Rickard pens a blog post about calls by U.S. Senators Grassley and Cornyn for more transparency in the third-party litigation financing industry. She writes, "Investing in lawsuits puts unconnected third parties in the middle of our legal process, and both lawmakers and the courts have an obligation to examine this industry, whose meteoric growth threatens to distort our system of justice." (ILR Blog) Read More »

In the News Today - August 25, 2015

August 25, 2015 | News and Blog

Luke Barrett, head of legal and risk at UniSuper, one of Australia's largest institutional investors, criticized the country's litigation funding industry, asking why they "are able to charge 30 percent to 40 percent of the recovery amount." Those amounts, Barrett said, "can often be a multiple of what the legal fees were." (Sydney Morning Herald) Read More »

In the News Today - August 24, 2015

August 24, 2015 | News and Blog

"Investors need to be careful of the 'new kids on the block' launching class actions in Australia because the growing market for class action law firms and litigation funders carries significant risk," warns Monash University law professor Vince Morabito. (Sydney Morning Herald) Read More »

Australia's Billion-Dollar Class Action Boon Being Fueled by Litigation Funders?

August 20, 2015 | News and Blog

A warning bell is being sounded as litigation funding is being cited as the reason for a class action boon in Australia, reports the Australian Financial Review. Read More »

U.S. Appeals Court Sides With Chevron in Ecuadorian Dispute

August 05, 2015 | News and Blog

In the latest development in the years-long dispute between Chevron Corp. and the Ecuadorian government, a U.S. appeals court on Tuesday rejected Ecuador's challenge to a 2011 international arbitration award in favor of Chevron for $96 million. Read More »

In the News Today - July 30, 2015

July 30, 2015 | News and Blog

Rashmi Rangan, executive director of the Delaware Community Reinvestment Action Council Inc., says the sate misused millions of dollars from settlements with Bank of America and Citigroup to pad its budget, and has called on Attorney General Loretta Lynch to investigate. (Delaware News Journal) Read More »

In the News Today - July 16, 2015

July 16, 2015 | News and Blog

Justice not Profit, a U.S. Chamber Institute for Legal Reform campaign to curb a the expansion of U.S.-style class actions in UK courts and the litigation funding industry in particular, was highlighted in The Guardian. (The Guardian) Read More »

Canadian Judge Orders Tobacco Companies to Pay $15 Billion in Damages

June 02, 2015 | News and Blog

Three tobacco companies - Imperial Tobacco, Rothmans Benson & Hedges and JTI-MacDonald - have been ordered to pay $15 billion in damages in a lawsuit "touted as the biggest civil case in Canadian history." Read More »

The ILR Research Review - Spring 2015

May 18, 2015 | Research

This edition of the ILR Research Review offers valuable insights from the latest of ILR's research on enforcement slush funds, Canadian class actions, emerging litigation trends and theories from the plaintiffs' bar, and recent state tort law rulings. Read More »

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