When settlement class action lawsuits followed the rise of mass tort class actions and gained acceptance, they eliminated the ability of plaintiffs' counsel to represent cases fairly, threaten trial as a bargaining tool or protect future plaintiffs from attorney conflicts of interest. This created a tension between protecting the rights and claims of the clients and created such a disadvantage in bargaining that attorneys representing members of a settlement class action were sometimes tempted to collude with the defendants' counsel in order to compensate for the inherent disadvantage in the interaction. Two minor ethical issues that arise in class action lawsuits involve marketing in order to recruit members of a class and how best to work with the "no contact" rule, however, the primary areas of legal ethics that need to be discussed are settlements and conflicts of interest. Much of this stems from the fact that settlement class actions are constructed merely to be settled and not to be litigated (Pastor 774). The subject is of interest because the problems that become obvious are similar to the problems that class action lawsuits were designed to prevent.
[...] The exception that is applied to settlement class certifications interferes with the right to litigate and future claimants are unable to decide whether or not they want to be involved because they may be completely unaware of the issues, injuries or damages. As personal injury claims for exposure to asbestos, tobacco, silicone gel, and other professed toxins threaten to swamp the torts system, many commentators have begun promoting the class action as a solution to the heavy court burdens, high transaction costs, and delayed benefits endemic to traditional mass tort litigation (Franklin 163). [...]
[...] Settlement class action lawsuits differ from traditional class actions in many ways, creating the arena for a wide variety of ethics problems. In the original terms of class action lawsuits, a group of plaintiffs would file suit against a defendant or group of defendants. The group consisted of plaintiffs with similar concerns being represented collectively. At first, this approach was seen as advancing victim's rights and streamlining a traditionally cumbersome process. In the beginning, defendants challenged the validity of class action suits because they believed that a single suit to resolve an entire issue in one decision would create the potential for blanket liability that could in turn open a doorway to a near infinite judgment or financial settlement. [...]
[...] The attorneys on both sides know that the class actions are going to be settled, that there will not be a verdict, and that members of the class are rarely involved in the settlement process. As stated above, many agreements are generated without plaintiff input and passed through a quick judicial review that often presumes that the settlement is fair, adequate and reasonable. There is little to stop collusion and "critics have argued for better devices to monitor lead counsel in negotiating settlement agreements that will be (or are) in the best interests of the class and not in the best interest of counsels' fees." (Langlois Eisen v. [...]
[...] Those in favor of settlement classes insist that members of the class receive more compensation when the issue is decided once and definitively. This idea is built on the belief that many will never bother with litigation because they are not part of the class and therefore, some money for being wronged is better than none. Somewhat more convincing is the argument that there is an inequity that would occur if a large number of similar cases went to trial. [...]
[...] Settlement class action lawsuits have become more frequent and popular with defendants despite the original risks and issues. These settlements now allow defendants to limit their liability on a large number of claims quickly rather than run the risk of long and uncertain proceedings. Settlement class action lawsuits also provide rapid solutions for judges and can allow lawyers representing the plaintiffs to generate large fees. The key ethical dilemma is that the system does not adequately protect the rights and concerns of future members of the class. [...]
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