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 - July 20, 2018

    July 20, 2018 | News

    "Finally: A Plaintiffs' Lawyer Who Stopped at Nothing Pays the Price;" Arkansas Lawmaker Says Retirement Fund Leader Should Resign... Read More

  2. Finally: A Plaintiffs' Lawyer Who Stopped at Nothing Pays the Price

    July 20, 2018 | Blogs

    A New York appeals court has turned what could be the last page on a twisted tale of manipulation, bribery, back-room dealing and bombast that is sure to go down in legal history. Last week, the court suspended the law license of plaintiffs' bar crusader Steven Donziger until further notice.... Read More

  3. In the News Today - July 13, 2018

    July 13, 2018 | News

    "Chevron's Longtime Nemesis Hits the End of the Road"... Read More

  4. New ILR Research Finds EU Consumers Are Skeptical of New Collective Action Proposal

    July 11, 2018 | News

    A survey released by the U.S. Chamber Institute for Legal Reform (ILR) found that only 13 percent of European consumers support the European Commission's proposal on collective actions as it is currently written. ... Read More

  5. Survey: Only 13 Percent of Consumers Support European Commission's Current Collective Action Lawsuit Proposal

    July 11, 2018 | Press Release

    ... Read More

  6. A 'Fair Deal' for Consumers? An Update on EU Consumer Attitudes Towards Collective Actions and Litigation Funding

    July 11, 2018 | Research

    As the European Commission's proposal on collective actions (known as class actions in the United States) makes its way through the European Union's legislative process, it is important to assess EU consumer opinion of the proposal and the safeguards included (and not included) in the legislation. This survey captured the views of 5,097 consumers across five EU Member States.... Read More

  7. In the News Today - July 9, 2018

    July 09, 2018 | News

    Argentine Court Rejects Attempt to Enforce Ecuadorian Judgment Against Chevron; Impeachment Proceedings Against West Virginia Supreme Court Justice to Resume This Week... Read More

  8. In the News Today - June 20, 2018

    June 20, 2018 | News

    Australian State Legal Commission Wants to Legalize Contingency Fees Arrangements... Read More

  9. 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

  10. 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