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Survey finds Americans frustrated with class action lawsuits

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).

Seventy percent favor significant reform of the class action lawsuit system.

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."

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