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 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.

The ILR Research Review - Spring 2015

May 18, 2015 | 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.

All Results for Class Actions Around the Globe

"Hired Activist" Sharon Stone Provides Latest Embarrassment for Backers of Anti-Chevron Litigation

March 03, 2015 | News and Blog

It's been an embarrassing year for those behind Ecuador's decades-long legal and PR battle against Chevron. Read More »

The ILR Research Review - Winter 2014

Author: Institute for Legal Reform | December 18, 2014 | Research

This edition of the ILR Research Review offers valuable insights from the latest of ILR's research on perpetual prosecution, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), social media, and transnational litigation. Read More »

The Australian Highlights ILR's Class Action Reform Efforts

December 01, 2014 | News and Blog

The Australian's Chris Merritt highlights ILR's Australian class action reform efforts in a story reporting on a new reform proposal set to be published by law professor Michael Legg in the Melbourne University Law Review. Read More »

BP: Oil Spill Settlement Administrator 'Misunderstood' Deal, Allowed Questionable Payments to Nonprofits

October 07, 2014 | News and Blog

BP told a U.S. Court of Appeals in New Orleans this week that the administrator of the Gulf Oil Spill settlement "misunderstood the deal" and allowed a collection of nonprofit agencies that "didn't suffer any losses from the spill" to be paid hundreds of thousands of dollars, reports Bloomberg. Read More »

In The News Today - October 2, 2014

October 02, 2014 | News and Blog

Judge Keith P. Ellison recently ruled that foreign investors who sued BP PLC over alleged stock losses related to the 2010 Deepwater Horizon disaster can continue to seek remedy in U.S. district court "even though they are litigating under English law". Read More »

ILR's Lisa Rickard Pens Article on the "Toxic Cocktail of Class Actions" Brewing in Australia

September 05, 2014 | News and Blog

A piece by President of the U.S. Chamber Institute for Legal Reform Lisa A. Rickard is today featured in The Australian. Read More »

Rise of Class Actions in Latin America Threatens Region's Growth

August 18, 2014 | News and Blog

Latin America has entered the 21st century with great promise. The region is experiencing a surge of startup companies and initial public offerings. Read More »

Five Banks Facing Largest Ever Australian Class Action

August 13, 2014 | News and Blog

Australian law firm Maurice Blackburn has filed open class actions against five banks over late credit card fees totaling hundreds of millions of dollars. Read More »

New U.S. Chamber Reports Signal Enhanced Risk of Lawsuit Abuse in Latin America

August 06, 2014 | News and Blog

Latin American countries are systematically changing their civil justice systems in a manner that threatens a coming wave of civil litigation and negative economic and social consequences, according to key findings in two new ILR reports released yesterday. Read More »

Class Action Evolution: Improving the Litigation Climate in Brazil

Author: Fernando Dantas M. Neustein, Mattos Muriel Kestener | August 05, 2014 | Research

This paper explores the state of class actions in Brazil as an imbalanced system that undermines safeguards to guarantee unbiased and predictable proceedings and discusses proposed legislative changes before the Brazilian Senate. Read More »

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