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Monday, October 1, 2018

The Class Action Suit: A Goldmine for Lawyers

     In a class action, a group of enterprising lawyers persuade a judge to certify a "class" of plaintiffs…and then proceed to bring a lawsuit on behalf of the class. If you're a member of the class, you'll get a letter giving you the right to "opt out" of the class. Most likely, you'll throw the letter away without reading it because--you guessed it--it's written in legalese. Since you didn't opt out, you're a plaintiff. And if the defendant ends up paying the money, you'll get your share, but it's usually a very small one.

     In April 2005, a Los Angeles Times reporter was surprised to discover that his son had been a plaintiff in a class action lawsuit against Bank of America. The son was equally surprised, and disappointed, to learn that his cut would be 49 cents, while the plaintiffs' lawyers collected fees in excess of $2 million. In a similar action against Citibank, unwitting plaintiffs reported receiving checks as small as 2 cents. The legal fees were over $7 million.

Adam Freedman, The Party of the First Part, 2007 

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