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.



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All Results for Class Actions Around the Globe

In the News Today - April 14, 2015

April 14, 2015 | News and Blog

An editorial in The Wall Street Journal asks whether there were any actual victims in a "bizarre" Consumer Financial Protection Bureau (CFPB) case in which an $80 million settlement was reached with Ally Bank in 2013. The CFPB alleged interest rate discrimination against car buyers who were assumed-but never proved-to be minorities. (Wall Street Journal) Read More »

In the News Today - March 31, 2015

March 31, 2015 | News and Blog

Law Times reports on the joint ILR-Canada Chamber report, released last week, which shows "'a tide' of class action lawsuits is a major concern for Canadian business." (LawTimes) Read More »

In the News Today - March 30, 2015

March 30, 2015 | News and Blog

The Wall Street Journal editorial board writes that U.S. Attorney for the Southern District of New York, Preet Bharara, is being sued by financier David Ganek "for destroying his business and depriving him of due process and other constitutional rights." Writing that Bharara isn't the "first ambitious prosecutor to abuse his discretion," the editorial board hopefully notes the case could become "a referendum on Mr. Bharara's methods and ethics in his campaign against alleged insider trading." (Wall Street Journal) Read More »

ILR Report Critical of Canadian Class Actions

March 30, 2015 | News and Blog

"The growth of third-party litigation funding is helping to fuel class action lawsuit abuse in Canada, according to Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform, which has released a new three-year study of Canadian class action suits," writes Corporate Counsel's Sue Reisinger. Read More »

Painting an Unsettling Landscape: Canadian Class Actions 2011-2014

Author: John H. Beisner, Gary A. Rubin, Jordan Schwartz, Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, DC
Gordon McKee, Will Morrison, Blake, Cassels & Graydon, LLP, Toronto, Ontario | March 23, 2015 | Research

This paper expounds upon notable developments in Canadian class actions and provides commentary on how businesses facing putative class actions in Canada can best defend against these lawsuits and participate in potential opportunities for reform. Read More »

"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 »

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