Class action lawsuits - Wikipedia, the free encyclopedia

For those who are still a little uncertain about the nature, extent and ambit of the class action lawsuit, take a look at Wikipedia, the free encyclopedia has to say.

As to criticisms of the actions, Wikipedia looks at two: One, that it encourages attorneys to bring a class actions on behalf of everyone injured by a wrongful act and then bind everyone with an unreasonably low settlement just to quickly obtain large attorney fees. These are sometimes referred to as coupon settlements. These coupon settlements (which usually allow the plaintiffs to receive minimal benefit such as a small check or a coupon for future services or products with the defendant company) are also a way for a defendant to forestall major liability by precluding a large number of people from litigating their claims separately, to recover reasonable compensation for the damages.

Two, that this mechanism is a form of taxation upon large business corporations that prevents them from aggressively pursuing innovation.