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Let Consumers Sue Companies

nytimes.com

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Re: Let Consumers Sue Companies

#101

Post by rayiner »

Sangermaine wrote: post #54
rayiner wrote: post #12

Class actions can be effective where the class members are relatively large, sophisticated entities. E.g. the data-breach class action brought by banks that is mentioned in the article. But in the consumer-protection space, we should consider alternatives. Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up s…

>Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up serving neither to compensate consumers nor really to deter illegal conduct. You're completely misunderstanding the purpose of class actions, and are using an oft-repeated error. The article itself explains the value of class actions. Class actions are an i…

> Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them.

If you think of litigation in economic-theoretic terms, yes, that's the purpose of class actions. But while you're in that head space, you also need to consider the principal-agent problem: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble.... Where the claims are small and the class members are unsophisticated, the principals (the consumers) don't have sufficient incentive to control their agents (the lawyers).

That manifests in class action litigation in two ways. Class action lawyers are incentivized to bring cases that are marginal on the merits: http://www.abajournal.com/news/article/posner_opinion_blasts.... They also are incentivized to settle good cases for for a fraction of potential damages.

The end result is a system that doesn't do a great job of really anything. Consumers get only a tiny fraction of what they've lost. Companies aren't deterred--they just treat the occasional payout as the cost of doing business.

Re: Let Consumers Sue Companies

#102

Post by odabaxok »

kogepathic wrote: post #72
dclowd9901 wrote: post #62

Earlier quoted context omitted.

The EU system seems to be very anti-consumer. Or is that what your summary statement is intended to elicit? (tough to tell, as it could mean either/or is the better system)

> The EU system seems to be very anti-consumer. I disagree. It is true that it is harder for EU consumers to sue a corporation, but in general I feel that consumer rights are generally stronger in the EU than in North America (OP's point about consumer watchdogs), so there is less reason for an EU consumer to sue a corporation. IANAL, but I'd say the EU system is anti-litigious, not anti-consumer.

> I feel that consumer rights are generally stronger in the EU than in North America

I agree with this, I feel the same. However, it seems to me, that if there is a customer related problem already in place, US will find it and react to it faster. To put an example here, all of the major automotive recalls of the last few years were exposed in the US, while Europe reacted to them with a delay (Volkswagen diesels, Takata airbag, Toyota accelerator pedal).

Re: Let Consumers Sue Companies

#103

Post by Sangermaine »

ameister14 wrote: post #96
Sangermaine wrote: post #87

Earlier quoted context omitted.

I'm not assuming anything. I'm saying that he's misunderstanding the purpose and value of class actions based on the content of his comment, and am not impressed by attempts at arguments from authority. Appellate lawyer or not, his points were not good ones. I mean, the very article he's commenting on directly refutes his points about class actions resulting in less compensation for consumers and only or largely bene…

It's not an argument from authority. It's an attempt to sidestep the breaking things down into basic parts for non-technical discussion, by pointing out that the person you responded to is capable of having a technical discussion on the subject. You make some statements here that are arguable - for example, that 'class actions are an ideal instrument for redress of harm where the harm to any individual is small, but…

Yes, I noted that regulation or legislation is better, but we don't have them now. Under the current system, class actions are valuable instruments for consumers.

No one, myself included, is saying class actions should be "the final method", just that it's wrong to argue against them when they are currently generally the only method available to consumers for certain kinds of harm. I'd be the first to support robust regulatory protections that protect consumers to the point that they render class actions redundant, but sadly we don't live in that world.

Re: Let Consumers Sue Companies

#104

Post by nobodyorother »

hedora wrote: post #4

I never understood why binding arbitration was legal for non-negotiated contracts. Also, by reading this you agree all disputes between us will go through an arbitration firm of my choosing.

Well, that makes about as much sense as this comment being subject to section 1201 of the DMCA, due to it's double-ROT-47 encryption.

Re: Let Consumers Sue Companies

#105

Post by DannyBee »

Sangermaine wrote: post #54
rayiner wrote: post #12

Class actions can be effective where the class members are relatively large, sophisticated entities. E.g. the data-breach class action brought by banks that is mentioned in the article. But in the consumer-protection space, we should consider alternatives. Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up s…

>Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up serving neither to compensate consumers nor really to deter illegal conduct. You're completely misunderstanding the purpose of class actions, and are using an oft-repeated error. The article itself explains the value of class actions. Class actions are an i…

"Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them."

Actually, you are misunderstanding the purpose of class actions. You may see it as s some ideal, but it's not why they were created. They were created to simplify similar cases into one case for the purpose of not having two trials when you could have one.. That's it. It was literally for the efficient administration of justice. Not to do what you suggest the purpose is. Take a gander at the history of the federal rules of civil procedure, this is very widely documented and known.

This is one reason the supreme court was able to say "no more". They are just a collection of court rules.

I'd also argue they are not the ideal instrument, as they rarely actually achieve any real gains for the individuals.

Re: Let Consumers Sue Companies

#106

Post by jacquesm »

dclowd9901 wrote: post #62
flexie wrote: post #51

In the EU you cannot bind consumers by such arbitration clauses: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A3... Consumers can usually sue corporations at a court in their own jurisdiction. Many European countries also allow class action law suits. Yet, we have few law suits against corporations. There are other reasons for this: - consumers are not awarded punitive damages, - court fees are higher (u…

The EU system seems to be very anti-consumer. Or is that what your summary statement is intended to elicit? (tough to tell, as it could mean either/or is the better system)

No, it's anti lawyer. Consumers are doing fine. Consumer watchdogs have actual teeth and when companies are found to have misbehaved the penalties can be quite severe.

The difference is that consumers don't usually get rich from suing companies, we don't have a 'legal lottery' for every little thing that spoils your day and that you feel grieved about. That higher barrier keeps the courts free for stuff that is important and at the same time makes sure that we don't end up with a climate where everybody is suing everybody else all the time.

Re: Let Consumers Sue Companies

#107

Post by xxXXxx- »

uiri wrote: post #88
mikeash wrote: post #79

Earlier quoted context omitted.

I don't understand why binding arbitration is legal for anything ever. Having your disputes resolved in court is a fundamental right. Signing away that right in a contract should be impossible, like signing yourself into slavery.

I agree with you in principle that you shouldn't be forced into binding arbitration a priori before any dispute arises. I disagree with you on the point that I think binding arbitration can be a useful alternative remedy to the traditional legal system. Binding arbitration serves to resolve the dispute. If you can go through binding arbitration and then still go on to sue in court, then it isn't really very binding,…

>I think binding arbitration can be a useful alternative remedy to the traditional legal system.... It is often beneficial for both parties to go through the accelerated process of binding arbitration.

We see this on TV.

Those court shows (Judge Judy, People's Court, Judge Mathis, etc) are not actually "real" court, but are binding arbitration. By agreeing to arbitration both parties who appear in those forums "win" in some way no matter the outcome. The judgement is paid by the show instead of the defendant, both parties get an appearance fee plus an all expenses paid trip to Los Angeles or New York (depending on the show). So the plantiff is guaranteed quick payment if they win the case and the defendant is guaranteed not to have to pay even if they lose.

Another benefit is the plantiff doesn't have to express any effort trying to collect the judgment (like appearing in court again to get an order to garnish the defendant's bank accounts) and the defendant won’t have any civil judgement on their record (they can show up on your credit report and can negatively affect your credit score)

On top of all this the audience is entertained, Judge Judy is one of the most popular daytime shows.

(Also the judges on these shows are [usually] MORE experienced than the magistrates who hear cases in small claims court)

Re: Let Consumers Sue Companies

#108

Post by throwaway76543 »

clavalle wrote: post #60
throwaway76543 wrote: post #33

Earlier quoted context omitted.

Because the risk of paying litigation expense is in the four, five or six figures. Chasing a return with a potential risk of loss several orders of magnitude higher is insane.

I think the point is that the potential risk starting so high is keeping people from seeking proper justice.

Yes, that is my point

Re: Let Consumers Sue Companies

#109

Post by dspillett »

eli_gottlieb wrote: post #64
wimgz wrote: post #14

“only a lunatic or a fanatic sues for $30.” A bit off topic here but this is IMHO a great challenge for AI: making a lawyer affordable for the masses when they are bullied by banks, airlines, etc. If it costs you $5 , why not sue for $30 ?

>A bit off topic here but this is IMHO a great challenge for AI: making a lawyer affordable for the masses when they are bullied by banks, airlines, etc. That isn't a great challenge for AI. That's a rotten legal and regulatory system. Why band-aid over society's real problems with software?

If you try to fix the broken system people who take advantage of the bad parts may fight you and/or sneak worse loopholes in (they tend to have the money to lobby hard).

If the AI makes it expensive to take advantage of the problem then they'll simply stop doing so.

Of course the race will be on to be the first person to work out how to trick the AI, that person could make a boat load before it is fixed or self-corrects.

Re: Let Consumers Sue Companies

#110

Post by [deleted] »

redm wrote: post #8

I don't disagree with the sentiment of the article given the examples provided, i.e. Wells Fargo. That said, given the climate for frivolous lawsuits brought by "shakedown" attorneys, it opens the flood gates for something far worse. Maybe a better compromise is to allow for binding arbitration UNLESS the company is found guilty of fraud or other illegal activity, such as Wells Fargo. Alternatively, perhaps tort refo…

[deleted]
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