Thursday, March 29, 2007

class action

145 billion dollars payout in a lawsuit, settlements worth billions of dollars to avoid such law suits - you can see Class Action is about serious money.

Almost always lawyers stand to gain the most, taking sizable (even 50% at times!) cut of the punitive damages over and above contingency fees. Corporates never tire of talking how it is a medium for blackmail. Find a large company with deep pockets, a few disgruntled people and a greedy lawyer and you have a classic class action suit.

And now they say that class action law suits are being introduced in Europe as well, albeit in a variety of flavours. And among the things being debated are various controls on the process to prevent it from going the American way - limits on punitive damages, no juries to prevent the awards from jumping through the roof, or not allowing lawyers to keep a slice of the pie.

Here's what I think everyone should do: award the actual damage to the plaintiff and impose punitive damages on the miscreant corporate but let that money go to public welfare.

The punishment will be fair - taking the size and responsibility of the corporate into account. Awards will also be fair - just the actual damages. The lack of incentive will keep scroungers at bay. And I'm sure in every country public welfare can use the money; not only that, awarding punitive damages to society will be an indication of where the responsibility of corporations lie.

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