Class actions can change a company's bad behaviour - but not necessarily riches for shareholders

Class-action shareholder suits remain a popular fixture in courts throughout the land, though they very rarely pay shareholders much of anything, according to a Stanford Law School Securities Class Action Litigation Clearinghouse report.Nor are they a good way to change a company's bad behavior.

Some might argue the lawsuits serve as a deterrent to bad behavior. That's a hard sell: Because there are so many lawsuits, they carry little stigma.

That shareholder suits will almost immediately follow a company's bad news is now a matter of custom. In the last few weeks shareholders sued H&R Block Inc., Evanston-based Northfield Laboratories Inc. and Bausch & Lomb Inc., to name a few.

There were 182 federal securities fraud class actions in 2005, according to the Stanford survey, which keeps numbers in cooperation with Cornerstone Research, a consulting firm that does financial and economic analysis in commercial litigation.