For Whom Does the Ambulance Bell Toll?

Corporations can be terrible, but so can greedy lawyers.

Data breach class actions have spawned a whole new breed of class action lawyers—I can’t wait for John Grisham to jump on them.

I believe corporations and other entities should be held legally accountable. Sometimes the only way to do that is with a lawsuit. At times, single lawsuits wouldn't work, and similarly aggrieved people must band together. This is what happens in a class action lawsuit, which allows representative plaintiffs to act as plaintiffs for their class. There are often multiple classes in a federal class action lawsuit. This is true in some state class actions as well. The settlements are often tens of millions of dollars, sometimes hundreds of millions of dollars.

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What do the class members get for all of this?

The suspense must be killing you…

Not much. Shocking…I know.

Between $13-$90 per person according to a 2019 empirical analysis done by Reuters.

Screwed by a spreadsheet warrior who is OCD.

I’m as pro-plaintiff as it gets, but I don’t like the direction of class actions in the data breach realm.

And what is the size of the average class action settlement? $56.5 million. Furthermore, the median claims rate (according to the FTC) is 9%. Contrast that with the average personal injury settlement where the average settlement is $60,000 plus. Usually this would mean $20,000 for the medical bills, $20,000 for the client to walk away with, and $20,000 for the lawyer. Now, the standard fee is 40% if a lawsuit is filed, but, if the lawyer can resolve it without a bunch of time and costs, then it can be a good idea to split 1/3 1/3 1/3.

What do lawyers make in class action lawsuits? Well...the defense lawyers make hundreds of thousands of dollars defending these massive lawsuits, and the plaintiffs lawyers get between 35-40%  of the total recovery on average. The more claims that are filed the smaller the payout for the class members. Lawyers can elect to take a percentage, or they can multiply their hourly rate times the hours they worked, and there is a formula that's applied. In larger states it's not unusual for lawyers to bill exorbitant rates ($500-$1,000). It's great for the lawyers, but most of the money goes to ID protection and credit monitoring neither of which help much.

So... What do you do when you hear lawyers talking about "truth, justice" and all those inflated and meaningless words in the context of many class actions? I'd be skeptical.

For whom does the ambulance alarm toll? It tolls for thee if the lawyer makes it only about him or her.

If you are an associate, it means you are lining the pockets of the ONLY person whose name is on the door. You must ask yourself, why is only this person’s name on the door? Reasonable minds can disagree, but it makes you wonder…and I don’t curse in emails. It’s bad for business.

Give me a mass action any day because at least clients will “get paid” as opposed to the chicken feed they make in class actions.

Mass actions are individual claims filed by individuals and settled on a case-by-case basis against a common defendant. The claims likely have similar elements to them, but they vary based on the specifics of each plaintiff’s case.

Quite frankly, when I worked on class actions, I got tired of making money for one guy—especially when the claimants made comparatively very little money. At most a few thousand? That’s nothing compared to what the lawyers make, which is hundreds of thousands if not millions.

How is this JUSTICE? Give me a freaking break.

I’ll tell you what kind of justice it is: ersatz justice.

Thanks for reading. Feel free to email me at michaelwuva78@gmail.com or michael@wellslaw.us. I use both.