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. Instead, it has become a profit-making business where redress for claimants is no longer the chief concern.  

Class action litigation in the U.S. is 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.  

A study done by the U.S. Consumer Financial Protection Bureau found that even when claimants do receive compensations from a class action, the average payout is $32. Compare this to the average amount plaintiffs’ lawyers take from a settled case - $1 million.

An increasing number of countries are adopting proposals to allow class actions, further burdening businesses in a difficult global economy while creating little, if any, real value for consumers.

ILR’s research found that Member States of the European Union have been accelerating the introduction of policies to facilitate lawsuits, but have failed to implement or maintain important class action safeguards to keep civil justice systems from attracting profit-seekers.   

While civil justice systems around the world differ from the U.S. model, we are seeing the globalization of class action litigation.  Plaintiffs’ law firms based in the United States are funding class actions in the UK and third party litigation funders based in Australia are funding cases in the Netherlands. As these class action systems develop around the world, those looking to take advantage of the courts in order to make a profit will follow.

As a result, ILR is urging policymakers in Europe (both in individual countries and at the EU level), Australia, Asia, and Latin America to think twice before adopting class actions without safeguards against abuse. 

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All Results for Class Actions Around the Globe

  1. In the News Today - June 19, 2018

    June 19, 2018 | News

    Australian Business Leaders Call for Class Action Review; "Bristol-Myers Squibb: 1 Year Later"... Read More

  2. Australian Financial Review Editorial Calls for Class Action Constraints

    June 19, 2018 | News

    An editorial from the Australian Financial Review called on the Australian government to regulate the explosion of securities litigation in the country.... Read More

  3. In the News Today - June 7, 2018

    June 07, 2018 | News

    Credit Rating Agency: Assignment of Benefits Abuse May Increase Florida Home Insurance Costs; ILR Recommends Class Action Reforms to the Ontario Law Commission... Read More

  4. ILR Recommends Class Action Reforms to the Ontario Law Commission

    June 07, 2018 | Blogs

    Twenty-six years ago, the Ontario Class Proceedings Act introduced class action litigation to Canada's most populous province. The law has gone unchanged since, but the Ontario Law Commission will soon release a report, and likely some recommendations, to the province's government to consider.... Read More

  5. Australian Legal Commission Recommends Major Changes to Class Actions

    June 01, 2018 | News

    The Australian Law Reform Commission released a number of recommendations for the country's class action litigation system, the Australian Financial Review reports.... Read More

  6. Canadian Court Thwarts Enforcement of Fraudulent Judgment

    May 30, 2018 | Blogs

    A long-running litigation campaign to force Chevron USA to pay a $9.5 billion Ecuadorian judgment, which a New York court found in 2014 to be a product of fraud and bribery, hit another roadblock last week in Canada.... Read More

  7. In the News Today - May 24, 2018

    May 24, 2018 | News

    Canadian Court Rejects Latest Effort to Enforce $9.5 Billion Chevron Judgment... Read More

  8. ILR's Rickard: "Grave Concerns" About Global Litigation Developments

    April 20, 2018 | News

    In an interview with The Australian, U.S. Chamber Institute for Legal Reform President Lisa A. Rickard said American businesses have "grave concerns" over recent litigation developments around the world, particularly in Australia.... Read More

  9. In the News Today - April 17, 2018

    April 17, 2018 | News

    Insurance Europe: Collective Redress Principles "Are Compromised"... Read More

  10. Business Groups Sound Alarm On Proposal That Could Make EU "A Major Global Hub For Abusive Litigation"

    April 13, 2018 | News

    Corporate Counsel details the response by business groups to a new EU proposal released this week that could lead to a class action lawsuit system that is as bad or worse than the U.S.... Read More