Proposed Bill Could “Straight Jacket” Class Actions
A new bill proposed by lawmakers threatens to stifle class actions and limit the few remaining protections defending consumers from large corporations, according to its critics.
The Fairness in Class Action Litigation Act narrowly passed through the House of Representatives last week. It is a revised version of a less ambitious bill that failed to pass through the Senate in 2016, leaving opponents with hope that this second-take will face a similar fate.
Intended to curb the kind of broad lawsuits that are often raised against pharmaceutical companies, as well as many other business sectors, the legislation could instead lead to diminished rights for individuals injured by negligence in those industries. New restrictions include:
- Tougher “class certification” requirements, including more consistent and serious injuries before a class can be formed.
- Disclosure of third-party litigation funding.
- Expanded options for appealing a class certification decision.
- Limited fees for attorneys who successfully prosecute a class-action lawsuit.
Many of these elements serve to make it harder for a class to be formed, adding deterrents for lone consumers who might seek to join one.
By making it more difficult for those individuals to pool their efforts into one combined legal action, critics argue the bill would leave plaintiffs unable to follow up such complaints.
The counter argument that the claims in class action suits are inflated also rings hollow. Cases that have little or no merit are unlikely to get far into the legal process before being dismissed, offering plenty of protection for the corporations this legislation seeks to protect.
Conversely, closing off one of the only forms of recourse for individual consumers, who typically have limited ability to fund their own legal action, leaves very little protection for the very people who need it. Nonetheless, the bill takes American patients – and others with legitimate grievances against large corporations – one step further down that road.
All of this is undoubtedly music to the ears of major drugmakers and manufacturers of medical devices, who spend enormous sums every year defending themselves in these class-action lawsuits.
Meanwhile, consumer groups have raised complaints and those who voted against the bill in the House of Representatives, which was split 220-201, have labeled it a “straight jacket” on the country’s class action mechanism, designed to protect victims of corporate negligence.
The Fairness in Class Action Litigation Act can be viewed in full here.
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