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Class action suit benefits

 
 
Reply Wed 31 Oct, 2018 07:17 pm
One of Brent Kavanaugh's first cases as supreme court justice deals with class-action lawsuits where members of the injured class receive no benefits.

The lawyers get paid, and money gets distributed to charities or law schools chosen by the lawyers, but none goes to the people injured.

I can see how this creates a financial incentive for pursuing such lawsuits, but I'm not sure it's always a bad thing.

After all, what if such a lawsuit is the only way of establishing a case law precedent against some abuse that would otherwise require legislation to correct?

Is the financial incentive necessary to motivate the lawyers and supporters of the case to invest in the lawsuit for the benefit of addressing the abuse?

If the lawsuit is rejected on the premise that the lawyers are benefiting monetarily more than individuals of the injured class, wouldn't that effectively block the public ability to seek legal remedy through the courts?
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seac
 
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Reply Thu 1 Nov, 2018 03:28 am
@livinglava,
I've been involved in a class action suits against companies that sold shares to the public under false pretenses. The money I lost wasn't that significant, but little did I know that these class action suits gets you back a pittance if any at all. The lawyers get almost everything. I lost $7000 in stocks of this one company and the class action netted me only $30.
roger
 
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Reply Thu 1 Nov, 2018 04:01 am
@seac,
I've heard about that. John Grisham and all that stuff. Maybe they have some preventative value. Maybe.
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livinglava
 
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Reply Thu 1 Nov, 2018 09:42 am
@seac,
seac wrote:

I've been involved in a class action suits against companies that sold shares to the public under false pretenses. The money I lost wasn't that significant, but little did I know that these class action suits gets you back a pittance if any at all. The lawyers get almost everything. I lost $7000 in stocks of this one company and the class action netted me only $30.

Idk, I think people make a business out of creating bad investments and then using lawsuits to milk the bad investments in yet a new way. I felt this way with the loan forgiveness for schools that go out of business. I can just picture people trying to get their schools condemned in order to get their loans forgiven.

As much as I hate to see people waste their money on bad investments, I think there has to be some deterrent to investing money in the first place. If everyone's money is always protected in whatever they invest in, where is the discipline to prevent the economy from overheating? Investment just becomes a way of circulating money.

Imo, the purpose of class action or other lawsuits is to establish case law where legislation would be too cumbersome to deal with legal details. Of course it is also a problem when case law becomes so complex that it does little good to study the actual statues because so much has been done in the courts to modify them.
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