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New Studies Find Class-Actions Benefit Consumers

Many people believe that decisions made in courtrooms have little to do with anyone other than the people directly involved in the lawsuits, but that is not the case. When courts make a ruling, they have to consider not only the circumstances of the case before them, but how their ruling will affect other people in similar situations across the country.

One example of people misunderstanding the far-reaching implications of court decisions is right-wingers claiming that class action lawsuits are “frivolous” because they only benefit the attorneys representing the plaintiffs. People might assume this because the plaintiffs’ attorneys often take large cuts settlements and awards from class action lawsuits, while each individual plaintiff’s award is relatively small, but that doesn’t mean the rulings don’t benefit the plaintiffs or others. Just because a plaintiff suffers damage less than the cost of bringing a lawsuit, does not mean that their loss is insubstantial. For many people, a few hundred dollars could mean months of savings. Not to mention the numerous injunctions that come out of class actions, preventing future harm coming to any workers or consumers.

The Center for Justice & Democracy recently released a report in which it noted that “class actions have not only helped victims of corporate law-breaking, but have also resulted in injunctive relief that protects us all from a wide array of corporate wrongdoing, from employment and civil rights violations to price-fixing and consumer fraud to automotive defects to healthcare abuses.” The report analyzed hundreds of class action lawsuits and settlements and found that nearly all of them resulted in substantial relief to the plaintiffs.

The CJ&D also pointed out that the lawsuits are sometimes more about accountability than relief. No one likes to see a bully get away with bullying, so there’s no reason to assume that injunctive relief is not satisfying. As the report noted, “without the class action tool, corporations and businesses can ignore the law far more easily and operate with impunity.”

The Rand Corporation came out with another report that challenged the right-wingers’ assertions that class action lawsuits result in higher costs in the industry. According to the report, “many people believe that fear of malpractice lawsuits drives physicians to order otherwise unnecessary care and that legal reforms could reduce such wasteful spending.” On the contrary, the court found that states that have enacted such reforms have not found a corresponding drop in healthcare costs. Instead, some states, such as Texas, have actually seen a rise in healthcare costs after making such reforms. 

The American Prospect wrote about the issue, stating that, “in Texas, they passed a constitutional amendment in 2003 that made it almost impossible to recover meaningful damages from medical malpractice. That was good for doctors – the number of malpractice claims plummeted, and malpractice premiums went down – but instead of falling, healthcare costs in the state actually rose faster than in the rest of the country.”

Conservatives may have their reasons for disliking class action lawsuits, but the results of these two reports suggest that at least two of the main arguments against class actions are baseless.

Our Aurora, Illinois consumer rights private law firm handles individual and class action predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocatesthe National Consumer Law Center, and local law school consumer programs. The Chicago consumer lawyers at DiTommaso Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

Our Schaumburg and Naperville consumer attorneys provide assistance in fair debt collection, consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases our Chicago consumer lawyers have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Skokie consumer protection attorneys who can assist in consumer fraud, consumer rip-off, lemon law, unfair debt collection, predatory lending, wage claims, unpaid overtime and other consumer, or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.