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 - October 30, 2018

    October 30, 2018 | News

    Florida's Insurance Rates Continue to Grow as AOB Challenges Fester; "The Challenging Securities Litigation Landscape in Australia"... Read More

  2. In the News Today - October 17, 2018

    October 17, 2018 | News

    London-Based Attorney Breaks Down Recent High Court Class Action Decision... Read More

  3. In the News Today - October 9, 2018

    October 09, 2018 | News

    UK High Court Blocks Class Action, Says Only Lawyers and Funders Will Benefit... Read More

  4. Over a Dozen Business Groups Sign Joint Statement Against EU Collective Action Proposal as Drafted

    October 08, 2018 | Blogs

    Today, my organization, the U.S. Chamber Institute for Legal Reform, joined 12 other European business associations to petition EU policymakers to make meaningful, commonsense changes to the European Commission's collective action proposal before they create a litigation industry across the Europe. ... Read More

  5. Leaked Litigation Funding Arrangement Shows Funder May Leave Class Members With Nothing

    October 05, 2018 | News

    A litigation funding arrangement in an Australian class action shows that the funder may walk away with a 250 percent return on investment while the claimants may get nothing, the Australian Financial Review reports.... Read More

  6. D.C. Suspends Law License of Steven Donziger

    October 04, 2018 | News

    According to Legal Newsline, the District of Columbia Court of Appeals suspended attorney Steven Donziger from practicing law in D.C. ... Read More

  7. Lawyers, Businesses Warn Of Legal Ramifications of Data Privacy Laws

    September 27, 2018 | News

    Lawyers and businesses in the U.S and abroad have expressed concerns over the ramifications of new data privacy laws, according to stories in BankInfoSecurity.com and Broadcasting Cable.... Read More

  8. In the News Today - September 21, 2018

    September 21, 2018 | News

    "How The British Airways Breach Will Reveal The True Cost Of GDPR"... Read More

  9. In the News Today - September 18, 2018

    September 18, 2018 | News

    How Will the Canadian Legal System Handle Artificial Intelligence?... Read More

  10. Will New Data Privacy Laws Lead to a Litigation "Surge?"

    September 17, 2018 | News

    In a BNA op-ed, attorneys from Manatt, Phelps & Phillips say the "lawsuits are coming, rain or shine" from California's new data privacy law.... Read More