Class Action News

House Approves Class Action Suit Reform

WASHINGTON - The House of Representatives today voted to pass S. 5, the "Class Action Fairness Act of 2005." Congressman Wally Herger supported the bipartisan measure for passage, saying that class action and broader lawsuit abuse reform are important for economic vitality and job creation. The legislation specifically reforms current law related to class action lawsuits, allowing such suits to be removed to federal courts, and reducing the potential for abuse of settlement awards by attorneys. The bill, approved by a 279 to 149 margin, now goes to President Bush to be signed into law.

"The huge increase in litigation costs in recent years is staggering. In 2003, our tort system cost an astonishing $246 billion. This represents a drag on our nation’s economy, dragging down small business expansion and depressing job growth. Clearly, the current legal system is broken.

"This common sense reform streamlines our court system and prevents settlements from giving trial lawyers millions of dollars, while the plaintiffs are left with worthless coupons.

"As part of broader legal reforms, the class action bill passed today is an important step in reducing abusive lawsuits. The bill will provide greater protections for the victims whom the class action device originally was designed to benefit, and will at the same time decrease the excessive burden of class action lawsuits on our economy.

"President Bush said in his State of the Union Address that Congress must work to make our economy stronger and more competitive. We can do this by freeing small businesses and entrepreneurs from junk lawsuits and irresponsible class actions. I look forward to continuing to support further efforts to curb lawsuit abuse this Congress through sensible medical liability and other reforms."

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	Did You Know?
	Class action lawsuits has many advantages. Class action lawsuits may offer a number of advantages because they aggregate a large number of individualized claims into one representational lawsuit. First, aggregation may increase the efficiency of the legal process, and lower the costs of litigation. Second, a class action ensures that a defendant who engages in widespread harm -- but does so minimally against each individual plaintiff -- must compensate those individuals for their injuries. Third, in "limited fund" cases, a class action ensures that all plaintiffs receive relief and that early-filing plaintiffs do not raid the fund of all its assets before other plaintiffs may be compensated. Finally, a class action avoids the situation where different court rulings could create "incompatible standards" of conduct for the defendant to follow.