It doesn’t take a large number of people to start a class action lawsuit. Such as the infamous case against the Bank of Boston in the Alabama state court in which the defendants, after their settlement had been approved by the judge, were shocked to discover that, not only did they not end up with money in their pockets, but actually owed their attorneys because their fees exceeded the recovery amount for the lawsuit. The need to closely review proposed settlement agreements in these cases came as a result of cases in which attorneys for the defendants received fees amounting to more than the defendants themselves actually obtained from such settlements. This includes ensuring the attorney’s fees charged to defendants are not excessive relative to the benefits offered to the plaintiff class members. Requiring high level scrutiny of the terms of every class action settlement.This is accomplished by mandating federal jurisdiction over class action lawsuits with “out-of-state” defendants. Eliminating “forum shopping” in which plaintiffs seek to file their lawsuit in a state most friendly to their cause.The purpose of the Class Action Fairness Act of 2005 was to protect both sides of such large class action lawsuits by: The Act also instructs the court to closely scrutinize settlements in class action suits, especially those involving corporate defendants. The Class Action Fairness Act gives jurisdiction to the federal court system in any class action suit in which there are 100 or more plaintiffs, where any of the class of plaintiffs lives in a state different from any defendant, or the amount of damages sought exceeds $5 million. The Class Action Fairness Act of 2005 is Congress’ answer to the abuse of class action lawsuits in which plaintiffs and defendants reside in different states, and the amount of damages sought is very large. These include the Private Securities Litigation Reform Act of 1995, which was designed to limit frivolous class action lawsuits in securities transactions, and the Securities Litigation Uniform Standards Act of 1998, which governs class action lawsuits regarding securities fraud.
As a result, Congress has enacted certain legislation to help limit such abuse. Over the years there has been some concern over the potential for abuse in class action litigation.
It is a good idea for the lead plaintiff, responsible for accepting or rejecting the offer on behalf of the group, to request a detailed accounting of their attorney’s costs to date, as well as the number of class members, to help determine whether a settlement offer is fair.
CLASS ACTIO LAWSUITES PLUS
It is important for members of the plaintiff class to understand that any settlement offer accepted must be split between them, usually after the attorney takes his percentage plus “costs.” Costs often include everything from photocopies and postage costs, to filing fees, fees paid to expert witnesses, court reporters for depositions, and other costs. Although the plaintiffs have sued the defendant as a group in a class action, the lead plaintiff bears the responsibility of accepting or rejecting a class action settlement. The monetary amount and other terms of a settlement may be negotiated for some time before an accord is reached.
CLASS ACTIO LAWSUITES FULL
Commonly, the defendant in a class action lawsuit offers the plaintiffs a settlement amount, which the plaintiffs can accept as full compensation, waiving their rights to sue in the future. Class Action SettlementĪ class action settlement is an agreement between the plaintiffs and the defendant after having worked out the issue outside the courtroom. In addition, class action suits are used in situations in which multiple separate lawsuits against the same defendant might impair the ability of other class members to protect their interests. A class action lawsuit may be pursued in circumstances in which separate, “piecemeal” lawsuits might result in erratic, unequal results, whether settlements or judgments, imposed on the defendant.
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