Most Americans favor
overhauling the class action lawsuit system, which many say produces
too much litigation and unreasonably high awards, according to a survey
of households published by the Insurance Research Council (IRC).
Class action lawsuits are
legal actions filed by a few individuals on behalf of a large number of
people who have a common interest in an alleged wrong. When plaintiffs
contend that a business has engaged in fraudulent business practices,
they file a consumer class action. When plaintiffs allege that the
defendant has caused them personal injury or property damage, they file
mass tort class actions.
The findings,
published in "Public Attitude Monitor 2000, Issue 1" and released June
6, are based on a telephone survey of 1,000 adult Americans conducted
in February.
"Americans have mixed views
about class action lawsuits," says Elizabeth A. Sprinkel, senior vice
president of IRC, based in Malvern, Pa. The IRC is an independent,
nonprofit firm founded and supported by insurance organizations.
"While
they show concern about individuals' ability to seek compensation from
large organizations, they worry about the number and size of awards of
class action lawsuits as well as the share of settlements that
attorneys claim," Sprinkel says.
Here are some of the survey's highlights:
- Seventy percent favor significant reform of the class action lawsuit system
- Forty-four percent say the number of class action lawsuits today is too high, while only 6 percent say the number is too low
- Forty-one percent say the
average size of awards in class action lawsuits is too large, while
only 10 percent say the size of awards remains too low.
The
survey also reveals what IRC calls an "interesting dichotomy in the
public's views of class action lawsuits." Seventy-six percent agree
that class action lawsuits give average people the ability to act
against large corporations with vast legal resources. At the same time,
73 percent believe that the lawsuits generate a lot of money in legal
fees but produce little monetary benefit for the people suing the
corporations.
Thomas J. Minton, a
Baltimore-based attorney and chairman of the American Bar Association's
task force on class action litigation, says class action lawsuits are
valuable tools for consumers to band together to fight large
corporations. Minton points out that the bar association has no
official policy on class action lawsuits.
"Consumer class actions are getting a bum rap," he says. "Those sort of public perceptions are largely wrong."
Minton
says attorneys collect a percentage of an award, but consumers still
reap a benefit. "A class action is a lot of time, a lot of investment,
and a lot of risk for the lawyer," he says. "Many class actions
generate a lot of money for consumers."
