Competitive advantage and the Problems with Class Action Law
© by Lucky7Star May 2006
I was reading our local today and came across a very interesting piece on the Op-ed page concerning the problem of dealing with Class Action lawsuits. I think another title could have been “The Fulity of Dealing with Lawyers in today’s Corporate America”…
Indictment shows the wider problems with class-action litigation by Spartanburg Herald Journal Editor’s Mike Smith–The indictment of one of the nation’s premier class-action law firms illustrates the problems with this kind of litigation. The firm of Milberg Weiss Bershad & Schulman gained fortune and reputation suing companies on behalf of disappointed shareholders who believed the companies weren’t doing all they could to maximize their stockholders’ investments. This and other kinds of class-action lawsuits have become famous for making vast sums of money for lawyers while returning very little to the people they are supposedly representing.
The problem with all of this seems to stem from the fact that the only ones involved with such litigation as primary players are the ones who have the bucks to join in and exercise a measure of influence… if we were to put this into some sort of computational terms. It would seem that all things being even the large law firms can match the large companies if not dollar for dollar, at least man to man in terms efforts to bring justice to all the litigants… In other words, systems uniformity leads to the elimination of performance based competitive advantage and shifts the competitive focus to cost minimization, in order to obtain maximum benefits to the primary players, namely the big law firm and the big company. Now in order to maximize the benefit, the path of least resistance, is to simply cut out the ones whom have the least influence, namely the poor Joe who offers little except the one who is injured for life but is, at the end of the day, serves only as the spark thru which to implement litigation. After that the injured party remains as only a pesky impediment to maximizing profits for the major players.
Case in point is Google’s offer to settle out of court for 60 million of which 30 million goes right off the top directly to the law firm. Forget the thousands of people who have been fraudently drained of funds, found their companies bankrupt, not to mention their reputations ruined for life by these corrupt and foul practices. Certainly new laws are called for but like the litigation that was brought to a successful conclusion against the tobacco industry and which proceeds were suppose to go to those who died of lung cancer, not a single penny found its way to health care… Health care in this nation is still only second to Dafar. Nothing really changed with the exception of a few the lawyers finding themselves few billion dollars richer. Except for a new cigarette tax it was just another day at the office and business as usual. The problem with writing new law is that you have the same ones rewriting the same old laws… Except the second time around they can do a better job, which can’t be good:)
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