As globalization results in the spread of American products, ideas, and services around the world, it is also resulting in the proliferation of U.S.-style litigation.
Outside of the United States, many countries have adopted or are considering the adoption of practices that incentivize frivolous lawsuits, such as U.S.-style class actions, contingency fees, and unregulated third party litigation funding, increasing the risk of litigation abuses abroad.
The United States has the costliest legal system in the world – $429 billion in 2016. Other countries, such as Australia, Canada, and the UK, are experiencing changes in their civil justice systems with the adoption of U.S.-like litigation features, such as class actions.
While foreign civil justice systems are not identical to the U.S. system, they can nevertheless create opportunities for similar abuses, such as settlements that provide substantial compensation to lawyers, while failing to provide much benefit to consumers.
There are troubling signs that U.S.-style class action systems are spreading globally. Almost every EU Member State, Canada, 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. While these proposals are not identical to the U.S. system, they can create opportunities for similar abuses, such as settlements that unfairly benefit lawyers rather than claimants.
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While U.S.-style litigation is increasingly adopted abroad, there is also a rise in foreign 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.