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Would a proper legal system allow for class action lawsuits? Such lawsuits are brought on behalf of an entire class of plaintiffs, often without their consent or knowledge, and they may only be given a chance to opt out of a settlement on the back end. On the other hand, one can appreciate the efficiency of not having to process multiple legal actions when a party has committed an alleged tort against a large number of potential defendants. I realize that the subjects of class action suits are often improper (e.g, those based on anti-trust), but I am talking of the concept of class action itself.

asked Feb 17 '13 at 17:44

El%20Manantial's gravatar image

El Manantial


Class action lawsuits are merely a mechanism for those who have had their rights violated to obtain compensation. It allows people to, in essence, pool their effort and resources in the costly and difficult process of maintaining a lawsuit. There is no reason why similarly situated victims of the same action or similar actions of a given rights violator should not be able to work together in this way.

That is not to say that every aspect of the current class-action lawsuit system is proper. For example, it might be better to require actual consent on the part of all class-members before their inclusion in the class. Furthermore, there is a problem with frivolous lawsuits of all varieties being brought, and class action lawsuits are not immune from this insidious problem--thus, some reform addressing this issue is in order.

Note that, in my opinion, the justification for class action lawsuits is not some sort of efficiency argument about saving court resources or the like, although that could be an extra benefit. Instead, it is the rights of the victims to obtain redress for their harms that is most important.

It is also worth noting that class-action lawsuits are one means for combating one of the most frequently encountered arguments that Statists advance in favor of invasive regulations--the argument that certain "negative externalities" are too diffuse for individuals to be expected to sue to obtain redress for harm done to them, and therefore the government must proactively prevent such harm via regulation.

The classic example is pollution--the argument of the Statists is that we cannot expect private lawsuits to regulate the harm done by pollution because the harm is spread out over a vast number of people and no single person is harmed sufficiently that it would be worth going through the costly process of a lawsuit to obtain redress. For example, if each of the 100,000 people in a city is harmed $100 worth by a polluter, then $10M worth of harm has been done by the polluter. However, none of the individuals will attempt to seek redress unless doing so is profitable (i.e., the expected return less the expected cost of the lawsuit is greater than zero). The most any individual can hope to obtain is $100 because that is the extent of their harm. We all know that lawsuits cost much more than $100 to maintain and that success is not guaranteed (not to mention the time and effort required to maintain a lawsuit). Thus, the argument goes, none of the harmed individuals will institute the lawsuit because it would cost more than it is worth, and therefore only regulation can alleviate the harm (which, remember is quite real and quite large).

The class-action lawsuit, however, provides a means for overcoming this problem without requiring the government to violate peoples' right via regulation. If the harmed individuals in the example above can pool their resources and institute but one lawsuit, then it may very well be in their interest to do so. For example, if a successful lawsuit would cost $2M, then each of the 100,000 affected persons would only have to contribute $20 to maintain a combined lawsuit. This leaves each victim with the prospect of an $80 net return, providing an incentive for the suit to go forward. Furthermore, only a few of the victims will have to expend the time and effort involved in the lawsuit, further incentivesing the bringing of the suit. Thus, the harm caused by the polluter can be alleviated through non-rights violating civil lawsuits, and each of the victims can obtain a measure of compensation they otherwise would not have been able to obtain.

answered Mar 10 '13 at 10:56

ericmaughan43's gravatar image

ericmaughan43 ♦

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Asked: Feb 17 '13 at 17:44

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Last updated: Mar 10 '13 at 10:56