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April 21st, 2009:

#12. Class Action Lawsuits

My Trusty Gavel

We Americans love to sue.

  • Fire us from our job? We’ll sue you.
  • Serve us hot coffee that we spill on ourselves? I hope you have deep pockets.
  • Arrest us for disorderly conduct at a baseball game? You’d better hope those cops didn’t touch us, or there will be a lawsuit on the way.

Sometimes we will even sue over legitimate grievances.

But filing a lawsuit takes a lot of effort. So as with most things that are hard in life, we Americans tend to spend a lot of time talking about suing people and very little time actually following through on our threats. While our general laziness about actually suing people probably prevents our courts from becoming clogged up with dog-bite suits, it also means that sometimes Americans aren’t suing big corporations when they should be.

That’s why the great patriots at the American Association for Justice (formerly American Trial Lawyers Association) invented the Class Action Lawsuit.

A Class Action Lawsuit is a lawsuit filed on behalf of a group of people—say people who bought iPod Nanos—without naming every individual. But every individual who meets the criteria is eligible to receive some of the settlement or award.

What is great about Class Action Lawsuits is how little you have to do to get involved. Someone else does the litigation, and you just collect the reward. Generally you’ll simpley receive something in the mail informing you of your eligibility and you just sign up on line or by mail. After that, you need not think about the lawsuit again. The lawyers will litigate it, take an enormous fee and pass along whatever is left of the proceeds to the members of the class.

This typically means you’ll get a check for some pittance in the mail – or maybe a voucher for a free rental from Blockbuster. Some whiners complain that lawyers exploit this system by charging huge fees. But that argument is nonsense. After all, the only thing better than winning a lawsuit is winning a lawsuit you didn’t even know about.

God Bless America!

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