Class Action Law Suits

February 6, 2012

Class Action Lawsuits really frost my windshield.

In November 2011, Senior U.S. District Judge James King approved a $410 Million settlement against Bank of America in a class action suit which alleged that the bank overcharged debit card users for overdraft fees.

It all sounds good and just – those greedy blood sucking banks! — until you get to the news that the Judge set fees for the class counsel at about $123 Million.

That is 30% of the award.

Maybe the bank was bad, and it really needed to be punished and to refund some excessive fees that were charged to customers.

But, for this law firm to step in and take $123 Million off the top? What in the world did they do to earn $123 Million? And how does this help any consumers who may have been victimized?

I’ve been waiting for the news on who will be litigating against that law firm for Piracy and Pillage! Haven’t heard anything yet, but I’m sure one of the other Class Action Conquistadores will step forward soon?

I recently was the beneficiary personally from a class action suit against an insurance company for some transgression that I don’t think really happened. Pretty sure I didn’t get any monetary benefit, maybe a coupon for a 10% discount on future premiums?

I do recall that the class action law firm received a 7 figure payout — not in coupons, but in real dollars!

Who pays for that? We do.

Over the years, I’ve read about proposals in Congress around “Tort Reform”.

I’ve read that some of the spiraling costs in our health care industry are in large part related to fear of litigation.

The Congressional Budget Office recently found that reforming the medical malpractice insurance system, a.k.a. “med-mal reform” — a.k.a. ‘tort reform’ — could save $54 billion over 10 years.

Other estimates are higher.

David Kendall, a senior fellow with Third Way, an independent ‘think tank’ recently said, “We found that roughly, between $92 to $207 billion dollars per year can be saved from reducing defensive medicine.”

My call: We are missing some real opportunities to reform our legal system and to save huge amounts in our health care system due to a continuing battle between Red and Blue.

Yet, if we look back in history, we would find that the Civil War was decided long ago.

Isn’t it time for each and all of us to find ways to find common ground and work together for the common good?

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