[EE-BO]

The real trouble with class action lawsuits is that by their nature they provide an incentive to attorneys to profit at the expense of their clients and the greater good.

When I was in public accounting, I did a lot of work on some of the largest asbestos litigations in the country. Obviously I cannot say too much about that, but what astounded me was how these things are structured.

Back when large numbers of people who were truly and seriously affected by asbestos were still alive, and suffering in terrible ways, the standard out of court settlement was $25,000 for death and $10,000-18,000 for the onset of serious health problems that could be linked to asbestos. The settlement was usually $2,500-5,000 for those who were willing to settle while they showed minor signs.

It seems cruel to say this, but the fact is most people who were badly impacted by asbestos exposure are no longer with us- not just because of the effects of the exposure but because of the amount of time that has passed since the stuff was largely removed from use.

Yet there are still occasional cases that arise which are serious.

The tactic now is to take 4-5 serious cases, add in several hundred or even several thousand cases where people were exposed from one to several times and have NO symptoms, and then try to get a class action settlement for the entire group.

The thought process is that a company is more likely to settle for $10,000 each on 1,000 claims for $10 million rather than risk those 4-5 really serious cases going to court for years and resulting in total rewards for those 4-5 people in the $5 million+ range each.

In the process, the really sick people get very little money- not much more than they did 20 years ago, the people who had minimal exposure and are unlikely to ever become ill get a few grand each, and then the attorneys pocket 30-35% of a multi-million dollar settlement. The appeal to the sick is that they get something now and don't have to sign on for a 10 year legal battle in the hopes of a big payoff. Clearly, attorneys have to talk their really sick clients into settling for next to nothing for these suits to work, and it happens!

Even less scrupulous law firms will sell their client lists across state lines. A big part of my work was to scrutinize client lists on these class action suits and a substantial number of claims were filed in multiple states. The goal is to get double payment on a single claim and the hope is that by giving companies these massive lists they will figure it is cheaper to settle than try to audit the claims and compare them to other firms who have also filed massive lists.

All that said, in this time of globalization and corporate consolidation we are seeing companies that have the kind of power, even greater power in many cases, that the trusts that existed in the US during the Industrial Revolution.

Class action claims are about the only recourse the common man has against these massive companies.

So I would be reluctant to do away with class action lawsuits entirely.

The solution I think is more strict enforcement of ethical standards. I think Earp makes a good point noting that attorney is the most common profession of government legislators.

The government goes after accountants and doctors all the time- just look at Sarbanes-Oxley and Medicare-imposed price controls on medical procedures.

But when was the last time the government took a heavy hand in the conduct of attorneys?...