A senator from Virginia has introduced a proposed piece of legislation that would have dramatic implications for class action litigation if passed. The senator proposed the legislation with the intent of making class action lawsuits more fair and more efficient for all parties involved, including the court system. The bill would increase the recoveries for victims deemed deserving and filter out claims considered unmeritorious. These meritless claims are viewed as an unnecessary burden on judicial resources, according to proponents of the bill.
There are a number of ways that the legislation would change class action litigation in federal courts throughout the United States. Here are some examples. First, the legislation would require the plaintiff to demonstrate to an affirmative degree that there is “a reliable and administratively feasible mechanism” that the court can use to determine which potential class members are encompassed within the class. That mechanism would also need to provide a feasible and reliable way to distribute funds to those class members.
Next, attorneys would be prohibited from receiving class counsel fees until an accounting of the overall amount of fees that the defendant had dispersed is conducted. One of the things that the accounting would need to identify is the overall amount of compensation given to the class, the estimated or actual number of members in the class, the average compensation amount disbursed, and the highest sum provided to any single class member. It would also have to list any amounts paid to other individuals, including plaintiff’s counsel, and the reason for the payment.