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Comment by exabrial | Hacker News Reader

Class action lawsuits are turning out to be a scam. It should be law that lawyers can't have more than something like 5% of the settlement, and companies should have to pay out as cash equivelant.

Reminds me of the Equifax settlement which was a total scam. "Free Credit Monitoring" was BS, as Equifax was going to pay itself for the product, and everyone in the USA already has "Free Credit Monitoring" anyway. For leaking all of my personal details, I'd love to be paid for the time and money I've had to spend cleaning up their mistakes after Equifax hired a music major as the head of Information Security.

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> It should be law that lawyers can't have more than something like 5% of the settlement

The settlement wasn't even cash, though. Did the lawyers get paid in V-Bucks? They should have been.

> Class action lawsuits are turning out to be a scam.

Anybody have a good idea of what proportion of class action lawsuits end up as "bad/not good enough for class members?"

Because anecdotally I think of a couple that had fairly reasonable-sounding payouts for class members. One was the Dow Corning breast implant settlement that ended up bankrupting Dow Corning and resulted in payments of $12,000 to $300,000 to class members depending on the exact symptoms suffered. Another was Collins v. United States which was settled for full back pay for all U.S. military veterans discharged under Don't Ask Don't Tell since 2004.

The anti-poaching class action settlement also paid me a handsome, if not enormous, sum for depriving me of the opportunity of working for companies that I had no intent of working for.

> It should be law that lawyers can't have more than something like 5% of the settlement

Then finding a lawyer willing to go through the long and complex class action lawsuit will be even harder and/or more expensive, resulting in fewer class-action suits, meaning the punishment for these scams will be even more unlikely than it is now.

Even if lawyers got 100% of the settlement, class actions would still be worth it as deterrent.

But this isn't a punishment at all. I just don't believe that it's not possible to more closely align the interests of class action lawyers with that of the classes they represent. It doesn't seem like it's difficult to find lawyers willing to initiate class action lawsuits today. They just never seem to amount to much more than a pay day for the lawyers.

> I just don't believe that it's not possible to more closely align the interests of class action lawyers with that of the classes they represent.

But how does capping the settlement % that goes to the lawyers achieve that?

Yeah, I'm not sure that's the right solution either. Perhaps there could be a third party "class advocate" that receives 1% of all proceeds awarded to the class in the case of a settlement or trial victory who has unilatteral power to veto any settlement agreement. Then their incentives would be aligned to ensure the maximum settlement while taking into account the probability of winning in court and the costs of prolonged delay, etc. If the class gets nothing, the class advocate gets nothing. If the lawyers make bank, but the class gets a pittance, the class advocate gets a pittance. The class advocate could also negotiate reasonable attorney fees for the class.

correct: right now the interests of the lawyers are aligned with the people they're suing, not the people they're representing.

Turning out? These lawsuits have been seen as "lawyers make millions, you get a coupon for your suffering" for many years now.

I remember discussions of this back on Slashdot during the Zip Drive click of death lawsuit where I eventually got a coupon for like $10 off my next IOMega purchase or something. Total bullshit.

The counter argument is that the companies need to be punished for their behavior, even if the victims aren't the ones who get the compensation in the end. I've thought that seems rather mercenary.

There was a "take the cash" option for that Equifax settlement, but nobody I know who opted for that ever saw a dime. I think they eventually weaseled out by saying that you had to prove in arbitration you were financially harmed by the breach to receive the cash or something.

Hey! That "music major" must have at least been well connected! She was just "managing" people anyways; not like she needed to know what she was doing.

Many of the best developers I can think of didn't major in cs; many didn't go to university at all.

I wasn't even able to get the free monitoring, they intentionally broke their website to not work

I agree, they seem to be a scam that once again benefits the rich (lawyers) over the poor (class/clients). More often than not I see the US courts as an extension of elitism and crony capitalism than a system of serving justice. Maybe that's vastly oversimplifying things, but I'd like to see a reasonable justification for this seemingly despicable process of lawyers getting rich off the backs of victims they represent.

>I agree, they seem to be a scam that once again benefits the rich (lawyers) over the poor (class/clients).

Can you elaborate on this? The ones being paid are "the rich", but so are the people paying. The poor aren't getting much out of this, but it's not like they were going to get anything without a class action. After all, if you thought you could get more, you can always opt out of the class action and sue individually.

Sorry I'm a couple of days late for this reply. The goal (or should be the goal) of a class action lawsuit is financial reparations to victims of wrong-doing. An example being faulty vehicle components as a result of manufacturer negligence leading to death or injuries. In this example, the lawyers are making millions off the lawsuits and most likely the victims are getting a very small payout at best. The company gets a slap on the wrist. From what I understand, opting out and suing individually comes with additional obstacles (and potentially less payout) for the legal team and client. When I refer to "the poor" I'm talking about the bottom 90% of income earners that typically make up the pool of "victims" exercising the class action suit.

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