Comments on: Damages: $0 settlement; Attorneys’ fees: $9.5 million

By: nevins

nevins — Wed, 16 Jan 2008 19:41:11 +0000

The lawyer representing himself in a case like this would have a fool for a client, but the client would have one hell of a shyster lawyer.

By: Legal Reform Is Critical

Legal Reform Is Critical — Wed, 16 Jan 2008 12:40:52 +0000

The amount of deadweight loss inflicted on the economy by the legal system is truly astounding. Every time Congress and the state and local legislatures pass a new set of rules and regulations, for example, the amount spent on legal work skyrockets.

However, in response to BarSinister, not all class actions are economically inefficient, regardless of how “unfair” it may appear that class members receive only a little whereas the lawyers receive a lot. There is a large literature on this subject.

The bottom line is that if numerous small claims (say, a company ripping off hundreds of thousands of customers by a few dollars each)cannot be aggregated, then these claims probably will go unremedied. Is this better? It costs a lot of money to bring these lawsuits, so of course the lawyers are going to be well compensated.

By: BarSinister

BarSinister — Wed, 16 Jan 2008 11:15:59 +0000

I just received a notice of a class action settlement against Countrywide. It provides qualified class members with the princely sum of $16.00, with the lead plaintiffs getting $5000. each. Attorneys get $300,000 for expenses and $1600,000 in fees. Lovely.

By: jtk

jtk — Wed, 16 Jan 2008 09:05:15 +0000

The judge cites a 350% increase in compliance spending as a justification for increasing lawyers fees. Just because they are spending more does not mean there is a net benefit to shareholders. It’s too bad the suit went after the directors personally forcing them to settle rather than risk losing their own assets. Shareholders are again the “winner” and the loser in this case.